Climate change is often framed as an issue that governments can solve by passing tougher regulations and investing in alternative energies.
But what if that’s not the whole story?
What if the private sector, rather than the public sector, holds the keys to confronting and slowing climate change?
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That’s the argument being made by a group of climate experts at the Carbon Disclosure Project in collaboration with the Climate Accountability Institute.
In a new report, they show that a mere 100 companies account for 71% of global emissions.
Further, just 25 companies are responsible for half of all emissions since 1988.
And if such an influential collection of companies don’t change their operations, then the status quo might not change much over the few decades.
If the pace of emissions continues at the same level over the next three decades, according to the authors of the report, average global temperatures will rise more than 4 degrees celsius by the end of the century, well above the goal of 2 degrees set by the Paris climate agreement, and high enough to usher in catastrophic changes.
The names of the companies that are most responsible for emissions are not entirely surprising — these are the fossil fuel giants of the world. China Coal Energy accounts for an astounding 14.3% of global emissions, Saudi Arabia’s Aramco covers 4.5%, and Russia’s Gazprom is responsible for 3.9%.
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There’s ExxonMobil in the 5th slot (2%), Royal Dutch in 9th (1.7%), and BP in 11th (1.5%).
But by describing emissions in terms of their corporate origin — the oil, coal, or natural gas extracted from the Earth — the solutions to climate change and the responsibility for action suddenly seem different.
From this perspective, the call for action should be directed at companies rather than governments.
The authors of the study aren’t claiming that government action is unnecessary — far from it, governments can actually mandate an end to fossil fuel infrastructure — but they’re trying to spur private companies to take decisive steps to change their business models so that emissions can be curbed in the years ahead.
If these companies begin to invest in renewable energies and abandon planned projects for new fossil fuel infrastructure, then perhaps emissions could be “decoupled” from economic growth, the scientists write.
In fact, continuing to rely on fossil fuels makes little long-term business sense, according to a 2015 study by Carbon Tracker, which found that companies stand to lose more than $2 trillion in the next decade if they continue pursuing fossil fuel projects because the demands of the Paris climate agreement make those projects implausible.
But that’s where the “absolute tension” comes in, as Pedro Faria, technical director at environmental non-profit CDP, told The Guardian.
Many of these companies are focused on short-term profits, rather than long-term viability, so many projects will be pursued despite the risks.
This tension could be resolved, however, by recognizing that renewable energy holds tremendous economic potential, more than $23 trillion in the years ahead, according to Andrew Light of the World Resources Institute.
Many of the biggest oil companies are already beginning to transition. Chevron, BP, and ExxonMobil are all investing significant sums into renewable energy.
And many state-owned enterprises, especially in China, are rapidly shedding fossil fuel infrastructure.
Averting the worst effects of climate change is an all-hands-on-deck affair and this report is an effort to broaden the scope of possible actions.
Michael Brune, the executive director of the Sierra Club, described the status quo in stark terms.
“Not only is it morally risky, it’s economically risky. The world is moving away from fossil fuels towards clean energy and is doing so at an accelerated pace. Those left holding investments in fossil fuel companies will find their investments becoming more and more risky over time.”