Billions are being pumped into unproven ‘climate solutions’

As part of the green transition, governments around the world are requiring companies to decarbonize their operations. This has led to a wave of investment in carbon offset schemes, carbon capture and storage (CCS) technologies and other “climate solutions” that have yet to be proven to work. Over the past half-decade, there has been great enthusiasm for medium-term mitigation of greenhouse gas emissions until we can achieve a global transition from fossil fuels to renewable alternatives. However, several recent studies suggest that many of these climate solutions have been overstated and have limited impact on greenhouse gas emissions from some of the biggest culprits.

In the US, the Biden administration has been clear in its support for CCS technology and other “climate solutions”, offering billions in investments from its Inflation Reduction Act (IRA) and other policies to companies investing in CCS. A recent analysis based on two OCI databases suggests that the White House has provided $12 billion in subsidies to technologies such as CCS that experts call a “colossal waste of money.” The biggest offenders – the EU plus the US, Norway and Canada, account for around 95% of public subsidies for CCS and fossil fuel hydrogen.

Several studies of CCS technologies have repeatedly found them to fail, cost overrun, or underperform. Despite decades of failures, energy companies continue to push for the use of CCS technologies to decarbonize operations and extend fossil fuel production. Meanwhile, several governments have promoted blue or green hydrogen, derived from natural gas, as a transition fuel, despite the high level of emissions generated during hydrogen production.

Robert Howarth, a professor of ecology and environmental biology at Cornell University, said: “The United States and other governments have little to show for these massive investments in carbon capture – none of the demonstration projects have lived up to their initial hype.” . Howarth added: “It is instructive that the industry itself invests very little in carbon capture. The whole enterprise depends on government handouts.”

Oil major ExxonMobil has pursued billions in White House subsidies for “climate solutions” that allow it to continue drilling for more oil and gas. Exxon regularly calls itself a “global leader” in CCS, saying he drives”significant change” in the fight against climate change. However, about two-thirds to three-quarters of the carbon captured in the US is used for enhanced oil recovery, not to mention all the carbon that CCS technologies do not capture.

Exxon’s staunch support for CCS technology and fighting climate change is perhaps surprising, given that the company denied the threat of climate change and opposed efforts to transition to clean energy just a few years ago. While some believe this shift in opinion is in response to growing government and consumer pressure to decarbonize, skeptics believe Exxon is advocating unproven “climate solutions” rather than investing in renewable energy as a means to maintain oil and gas production for years to come. Reports from Exxon’s CCS exploration over the past decade suggests that inside, Exxon provided CCS having only a limited role. One former company scientist saw “CCS to be a mediocre contributor to carbon sequestration“. However, as government subsidies for CCS and other carbon reduction initiatives have increased, so has Exxon’s interest in the schemes.

While Exxon and other oil companies around the world are investing in CCS, with government support, other companies are funding carbon offset schemes in an equally tragic way. Several hard-to-reduce industries, notably aviation, are investing in carbon offset initiatives in an attempt to remove carbon from the atmosphere, even if they cannot directly decarbonize their operations. These schemes include forestry schemes, hydroelectric dams and solar and wind farms.

However, a 2023 review showed that most environmental projects used as part of offset schemes have fundamental weaknesses and cannot be relied upon to reduce emissions. The analysis showed that 39 of the top 50 emission offset projects, or 78% of them, were classified as probably garbage – which means they cannot guarantee additional, permanent greenhouse gas reductions.

In May of this year, the Biden administration ISSUED a Common Policy Statement and New Principles for Responsible Voluntary Carbon Participation Markets (VCM) which codifies the US government’s approach to promoting high-integrity VCM. This was aimed at strengthening the market to ensure that VCMs deliver what they promise. This move was prompted by the publication of analyses, such as the one above, which demonstrated the failures of several existing carbon offset schemes.

While the publication of new VCM guidelines is a step in the right direction, the US government, like others around the world, continues to support and finance a wide range of unproven “climate solutions.” This government support allows fossil fuel companies to continue drilling for oil and gas when they should instead be investing in alternative energy sources and supporting a green transition. It also allows hard-to-mitigate industries to shirk their responsibilities by funding carbon offset schemes that repeatedly underperform.

By Felicity Bradstock for Oilprice.com

More top reads from Oilprice.com