4. Climate responsibilities, risks, and performance of fossil fuel producers

Organized by the Union of Concerned Scientists

Governments, industry, and individuals all bear some responsibility for climate change. But major investor-owned fossil fuel companies are substantial contributors to greenhouse gas emissions, and they have known for decades that their products cause global warming. The past year has brought new revelations of fossil fuel producers’ involvement in climate deception and investigations by public authorities, including U.S. state attorneys general and the Philippine Commission on Human Rights.

In this context, and in light of the commitments made by world leaders in Paris to limit warming to well below 2°C above pre-industrial levels and the growing calls by investors, lenders, insurers and other stakeholders for more robust disclosures of climate-related risks, what role should fossil energy companies now play? And what risks and consequences does this evolving role portend for investors in these global companies?

This panel will explore the responsibility of fossil energy companies in a carbon-constrained world, examining the degree to which major investor-owned fossil fuel producers can be motivated to a) align their business models with the targets set in the Paris Agreement, and b) adapt their communications and political activities to climate science and policy proposals to address it. Working principles for engagement between institutional investors and fossil fuel extraction companies will be presented, as will an objective analysis of the extent of these companies’ influence over climate policy. The results of a climate responsibility scorecard, assessing a sample of leading oil, gas and coal companies against specific criteria for a more responsible fossil energy company, will be discussed. Panellists and participants will be asked to consider how these initiatives to hold fossil fuel companies accountable can affect the future supply of fossil fuels.

7. Equity and just transitions

Organized by the Stockholm Environment Institute

Even as it is recognized as key to a durable and effective regime, equity has proven an especially challenging objective under the United Nations Framework Convention on Climate Change (UNFCCC). In addition to the well-known and comprehensively analysed equity issues that arise with demand-side climate policies, very different equity issues come to the fore in connection with supply-side policies. This session will be devoted to reviewing some of these equity challenges, highlighting their connection to effective climate policy, and examining possible ways forward.

Regarding the extraction of carbon resources, we will discuss questions such as: If carbon emissions are to be kept within a tightly constrained budget, who gets to still exploit their fossil fuel assets? What would the basis for distributing a “right to extract”?

With regard to supply-side policies and distributive impacts, we will ask: In what cases are supply-side policies regressive enough to significantly affect affordability and access? What steps can be taken to address that problem? What are the appropriate roles for international institutions such as the UNFCCC?

With regard to livelihoods and a fossil fuels phase-out, we will discuss: What “just transition” lessons can be learned from other sectors that have endured a rapid industrial decline? What compensating steps might be appropriate in the fossil livelihoods case?

Finally, looking at legal and ethical responsibility issues, we will consider: Is there a basis for moral or legal claims against extractors? Do any such claims shed light on issues of support for adaptation, or compensation for loss and damage?

9. Is a fossil fuels-led growth path still a viable choice for low-income countries?

Organized by Chatham House

Many new or prospective hydrocarbons producer countries plan to use their extractive resources to stimulate economic development and growth. The long-term prospect of carbon constraints suggests that this vison is far from certain. Yet to date, there has been little research on the risks and policy options available to new producers on managing carbon risks, avoiding carbon lock-in, safeguarding public health, and capturing benefits for low-carbon diversification.

The current period of lower commodity prices provides a window of opportunity to examine options for maximizing the contribution that a country’s resource base makes to sustainable and equitable economic growth, while ensuring that national development is geared for a swift transition away from fossil fuels. Informed and context-specific choices regarding the pace of hydrocarbons sector development, valuation of resources and externalities, export and industrial infrastructure planning and sequencing, and domestic energy policy will all be crucial to managing the uncertainty presented by longer-term carbon constraints. 

This policy roundtable will draw on the themes presented in the Chatham House research paper Left Stranded? Extractives-led Growth in a Carbon Constrained World in order to explore two key angles of this emerging debate: 1) For countries, how are the risks and opportunities of developing extractive resources changing in a carbon-constrained world, over short- and long-term horizons, and what information and advice are required to manage them? 2) For donors, where are the synergies and conflicts between the promotion of extractives-led growth, and low-carbon, green growth, and how should their offerings to client countries evolve to reflect increasing global and local carbon constraints?

10. Challenges for the Norwegian oil industry

Organized by the Centre for International Climate and Environmental Research – Oslo (CICERO)

This roundtable will discuss challenges facing the Norwegian petroleum industry in view of the Paris Agreement and turbulence in the energy market. Hit by low crude prices, tightening climate change regulations, and the failure of past investment strategies, the Norwegian oil industry faces severe challenges. The way forward seems to lie in diversifying into green energy, drastically reducing operational costs, and/or consolidating through mergers.

New research finds that the prognosis for international oil companies was already grim before governments became serious about climate change and the oil price collapsed – their old business model is dying. Others, however, have found that resources are abundant, even if the costs of extraction are likely to go up. Large financial flows are channelled to fossil fuel production and consumption, including government subsidies for fossil fuel production and large institutional investments such as pension funds.

The Norwegian economy depends heavily on oil and gas. The oil and gas sector has rapidly grown over the past decade, and represents 22% of the Norwegian economy. Panellists will discuss questions such as: What are the main political economy and geopolitical challenges of restricting fossil fuel supply? Will the market or government regulations decide which oil resources remain in the ground? What is the impact for the Norwegian oil industry in the Arctic (Barents Sea) of a future where oil and gas must be “low-cost and low-carbon”? How should the Norwegian government handle the risk related to asset stranding? How will Norway’s international reputation develop if oil drilling in the Arctic continues according to current plans? For how long can Norwegian gas play a role in Europe’s energy future, given new climate policy goals? Will the Norwegian government be able to forgo extraction and its associated rents?


Banner photo credit: Russ Allison Loar 2011, oil train