Photo Credit: Asian Development Bank
Will Cheap Oil Derail the Paris Agreement?
The recent UNFCCC meeting in Paris produced what many consider a landmark agreement in the fight against climate change. The Paris Agreement requires states to provide Intended National Determined Contributions (INDCs), detailing their plan for mitigating greenhouse gas emissions within their country. Many of those INDCs rely on transitioning away from fossil fuels to alternative fuel sources, a critical step in slowing the impacts of climate change and the related national security threats.
Plummeting oil prices have led to concern of whether states like the United States will follow through with the promises made in their INDCs. The U.S. and China have maintained their supportive policies and rhetoric so far, but many reports have cautioned early optimism. The New York Times noted the potential challenges from low oil prices, citing that,
“Low oil prices also jeopardize the development of alternative fuels to replace petroleum in transportation and industry, including the advanced biofuels that once looked so promising. Cheap oil also reduces the price of diesel, the primary competitor of renewables in spreading electricity generation to impoverished rural areas of Africa and Southeast Asia…if governments’ support wanes, the alternative fuel industries could take a hit.”
The “good” news for the U.S. is that while the development of alternative fuel sources for transportation may be impacted by lower oil prices, the primary contributor to emissions in the U.S., the electricity sector, remains coal-based. This leaves room for further mitigation of emissions in the U.S. regardless of lower oil prices.
Some argue that a lower price of oil may actually be beneficial in the fight against climate change. The argument suggests that because much of the oil left in the world is “high-cost, high-risk long shots such as the Alberta tar sands, deep-water reservoirs off Brazil, and drilling the high Arctic”, low oil prices will keep those reserves in the ground. Projects in the Alberta oil sands have been called off in the past year in part due to the decreasing per barrel prices. The reality of such statements remains to be seen.
Based on the goals of our INDC, U.S. efforts to curb emissions are unlikely to be significantly impacted by low prices. As noted above, low oil prices will primarily impact countries where oil is the main source of energy production. Unfortunately, many of those countries are also some of the highest emitters of greenhouse gases. For example, India’s primary source of energy is coal (44%) but they are also one of the top consumers of oil in the world. Petroleum makes up 44% of Japan’s total energy use and 39% of South Korea’s. The fourth largest country in the world Indonesia, is also highly dependent on petroleum.
While the U.S. and China are still the primary emitters, further increases in oil consumption by developing countries will lead to an increase of 4-6 degrees compared to the “desired” 2 degrees. Such an increase will contribute to the many secondary impacts on human and national security including food insecurity, instability and conflict. If the U.S. and those countries heavily reliant on oil fail to follow through with their INDCs, climate change will only multiply those risks.
For more information and to access ASP’s comprehensive report on climate security threats, click here.
