* Oil demand and emissions show steep rise in 2021
* Swiss voters reject idea to pay up to help cut emissions
* Politicians unwilling to take uncomfortable decisions
By Stephanie Kelly, Laila Kearney and Dmitry Zhdannikov
NEW YORK/LONDON, June 25 (Reuters) - Governments around the
world have been slow to take uncomfortable decisions to persuade
consumers to cut energy consumption to help achieve climate
targets, often because consumers are not ready to pay up or
compromise their lifestyles.
Researchers, policy makers and energy executives told a
Reuters Energy Transition conference this week that while energy
companies were under pressure to accelerate measures to reduce
emissions, governments have barely addressed reducing demand for
the fossil fuels that warm the planet.
A growing population in Asia and booming consumerism in
industrialised nations make most climate targets very difficult,
if not impossible to achieve.
Just this month, Swiss voters rejected environmental
proposals by governments to help the country cut carbon
emissions, including measures to raise a surcharge on car fuel
and impose a levy on flight tickets.
The International Energy Agency, the steward of energy
policies in industrialised nations, last month said the world
should not develop new oil and gas fields to achieve net zero
targets by 2050.
But its head Fatih Birol said this week net zero targets
were a pipe dream without global consumption patterns changing.
"We see a widening gap between rhetoric and what is
happening in real life," he said. So many governments are coming
with net zero targets by 2050 and the same year CO2 emissions
are growing and it will be the second largest increase in
history".
"Consumer behavior needs to change as a result of government
steps," he said. Emissions are rising sharply in 2021 after
falling steeply in 2020 as a result of global lockdowns to slow
the spread of coronavirus.
In France, according to Birol, the government is taking some
very early steps to discourage short-distance travel by plane.
At the same time, in Britain the government is busy
brainstorming how to revive a holiday season to save the airline
and tourism industries.
Birol said the IEA has over 400 milestones of what needs to
happen to achieve net zero targets by 2050 and 95% of those
milestones should be driven by changes demand not supply.
Many of those targets - such as banning internal combustion
engines car sold by 2030 or 50% of aviation fuels coming from
non fossil fuels by 2040 - are still wishful thinking as there
is no industry-wide, country-wide or global policy approach to
making those targets happen.
POLITICALLY UNCOMFORTABLE DECISIONS
The International Monetary Fund has repeatedly criticised
developing nations for wasting hundreds of billions of dollars
on subsidising cheap diesel and gasoline for the poor.
But even in the United States, which consumes a quarter of
world's gasoline, prices are just halve of those in Britain
because of low taxes. The government of U.S. President Joe Biden
has made no signal it would change that.
Instead, Biden is proposing sweeping policy efforts to
quickly electrify the nation’s vehicle fleet, as well as clean
up the power industry that would charge them. But none of those
goals will become reality without an act of Congress, an outcome
that is far from certain given the country’s deep-seated
political divisions.
"The transport sector may prove to be the hardest one of all
to decarbonized, and not for technological reasons, but really
for political reasons, economic reasons, business model reasons
and societal acceptance reasons," said Kelly Sims Gallagher,
professor of energy and environmental policy at The Fletcher
School.
"How do you convince people to buy an electric vehicle?
There really isn't a lot on the market that a lower income
family can buy... It really is going to require governments to
make politically uncomfortable decisions".
A Reuters/Ipsos poll https://www.reuters.com/business/autos-transportation/americans-are-curious-about-electric-trucks-low-cost-durability-come-first-2021-06-15
this month showed that Americans were skeptical about new
electric car and truck models, expressing concerns about the
potential costs and inconveniences of owning such vehicles.
Sims Gallagher says the policies that would work to
incentivize EVs are politically challenging - such as imposing a
fee on high emissions vehicles and rebate on low emissions
vehicles.
Another challenge is a clean grid and many industrialised
countries have old grids that need reconstruction.
Rodolfo Lacy, director at the Organisation for Economic
Co-operation and Development, estimates that more than $500
billion is being given by governments on fuel subsidies globally
every year in one form or another.
"We need to start to think about phasing out infrastructure
and technologies that we do not need for the future," he said.
Besides direct fuel burn, the jury is still out if the world
can afford to continue shipping huge amount of goods daily to
deliver computer equipment from China to Europe or south
American fruit out of season to the United States.
Asia's rising population will encourage further energy
consumption and those people too aspire to have their standards
of living improve.
The heads of oil majors such as BP, ENI and
Equinor, who took part in the Energy Transition
conference made it clear - oil and gas prices were poised to
rise as producers reduce their output of fossil fuels under
pressure from investors while demand keeps rising.
"I don’t sit here saying we have to wait for society... If
the supply side moves too early and society doesn’t move, we’ll
have a mismatch," said BP CEO Bernard Looney.
(Reporting by Laila Kearney in New York, Rod Nickel in
WINNIPEG, Manitoba, Ron Bousso; Writing by Dmitry Zhdannikov and
Richard Valdmanis;)
BP (BP.)
