OPINION: President Joe Biden moved the US back to a central role in tackling climate change at last week’s virtual Leaders Summit on Climate, hosted by the White House.
Forty global leaders, including all G20 nations, participated in an event where the US announced it will cut emissions by at least 50% by the end of the decade compared with 2005 levels.
The US will also pursue a goal of net-zero carbon emissions by 2050, following a trend started by the UK and France in 2019.
A parallel US-led initiative, announced on 23 April, will form a net-zero forum in partnership with Canada, Norway, Qatar and Saudi Arabia, together representing 40% of global oil and gas production.
This club promised co-operation in phasing out unabated fossil fuel emissions, while reducing emissions to “the maximum extent possible” in the interim.
Such initiatives are built upon the premise that societies of all kinds have made a choice in favour of tackling climate change.
China’s 2020 pledge to achieve net-zero status by 2060 was perhaps the most significant step-change, given the country's status as the world's biggest emitter of greenhouse gases.
But crowd-pleasing targets and good intentions will not be enough to achieve the Paris Agreement targets.
Scientists say emissions must fall 45% by the end of this decade to keep a 1.5 degrees Celsius warming limit in sight.
Governments must now introduce policies that will draw billions of dollars of investment into energy transition.
Some truly green energy sources are not yet ready to compete head-to-head with fossil fuels in terms of cost and energy efficiency.
Hydrogen is often held up as a part of the solution, but the green variety that uses renewable energy and electrolysis is still up to six times more expensive than blue hydrogen, which uses natural gas to produce hydrogen with the carbon dioxide captured.
Recent reports suggest green hydrogen will become cheaper than blue hydrogen within this decade, but current cost differences cannot be wished away.
The European Commission has announced plans for at least 40 gigawatts of renewables-powered electrolysers to be installed by 2030.
Hydrogen strategies now emerging in Europe are quite diverse.
Solar-powered electrolysis could drive the creation of hydrogen hubs in southern Europe, but blue hydrogen and carbon capture and storage may make more sense in the UK, Netherlands or Norway, with their declining oil and gas industries and depleted gas fields.
An impressive array of projects is already taking shape in this region, including the HyNet North West project on Merseyside, Net Zero Teesside and H2H Saltend on Humberside in the UK, and Norway's Northern Lights project.
Oil companies bring long-established expertise in managing and financing such projects. Blocking them on political grounds, as many opponents urge, would leave gaps in some zero-emission plans.
Anything but an inclusive, businesslike approach to energy transition could undermine such targets and leave consumers facing the consequences.
To accelerate the energy transition, a powerfully effective carbon price should be a starting point. If properly implemented, this would be interventionism at its best, but there must be a level playing field on a global scale and a new spirit of co-operation.
In this sense, China’s President Xi Jinping and Russia’s President Vladimir Putin participating in Biden’s event was encouraging.
A global consensus on carbon pricing, acceptable industrial practices and eliminating fossil fuel subsidies suddenly looks achievable.
Now is the time.
(This is an Upstream opinion article.)