Posted on 27 February 2023
Fossil fuels drove the current energy crisis - and now the companies that produce them are raking in record profits and failing to invest them in a brighter future. This must change to avoid further climate chaos for people and nature, writes Dean Cooper, WWF’s Global Energy Lead.
The energy crisis has spread across the globe, with prices multiplying as quickly as the concerns about having enough energy to keep homes, businesses and entire countries running. The linked cost of living crisis has driven 71 million people
in developing countries into poverty, with some 100 million people potentially pushed back into relying on firewood for cooking instead of cleaner, healthier energy solutions.
And all along, the climate crisis has raged.
The past year has presented catastrophic examples of the worsening global climate and nature crises. Climate change has led to record droughts all over the world, devastating flooding
, and existing energy sources such as hydropower and nuclear becoming increasingly unreliable
. And it’s clear that urgent action is needed to address the terrifying 69%
average reduction in wildlife populations since 1970.
But not everyone has had it bad.
Fossil fuel companies have had their most profitable year in history
, racking up ~4 trillion USD in profits in 2022 (double the level in 2021). This windfall was partly due to high energy prices, and also due to record subsidies from governments – in 2022 fossil fuel consumption subsidies were, for the first time ever, more than UDS$ 1 trillion
Given the urgency of the climate and nature crises, you might think that fossil fuel companies would use all these profits to help solve the biggest threats facing humanity. And this could be of enormous help – one study
has shown that planned investments for new oil and gas by 2030 could fully finance the scale-up of wind and solar energy needed to limit global warming to 1.5°C!
Alas, these record profits from high fossil fuel prices have predictably yet devastatingly led oil & gas majors to scale back commitments to renewables and instead revamp their investments in fossil fuels.
This could not be more misguided. Our reliance on fossil fuels created this energy crisis, and our continued reliance on them means not only more energy crises in the future but also a continued, worsening situation until we reach the point of no return. A point when it's too late for us to fully repair the damage caused by the impact of fossil fuels. But given that the current energy crisis has created record profits for fossil fuel companies, it’s no surprise they don't want to be a part of the solution. New fossil fuel development is incompatible
with limiting global warming to 1.5°C and a short-term focus on profits from fossil fuel companies may lock us into more climate chaos.
Thankfully, this destructive path is not the only way. The energy crisis provides the motivation to move towards a brighter future. Renewables such as carefully located wind and solar, in addition to reducing emissions, provide cheaper, more secure energy that safeguards nature. And due to increased fossil fuel prices and declining costs of wind and solar, never has there been a clearer economic case for renewables.
Many countries and companies have realised this – the IEA predicts
2,400 GW in renewables growth for 2022-2027 and for renewables to become the largest source of global electricity generation by early 2025. This is fantastic progress – yet more is needed, and faster. We have the tools to build a 100% renewable world and the awareness and capability to ensure the least damage to nature – and faced with cost of living struggles, devastating floods and droughts, energy insecurity, and weakening energy access, we need renewables, alongside energy efficiency improvements and efforts to reduce demand, now more than ever. It is clear that fossil fuel companies have no interest in helping to build this brighter future, but we must not let them stop us from achieving it. Governments must stop subsidising the problem and focus their efforts on the real solutions.
Energy has never been more relevant or important to us all. The world has reached a turning point, and the decisions we make now in response to the energy crisis will have impacts for years to come.
We must act immediately to avoid the pending global catastrophe, and we all can play a part. We cannot afford to miss turning the current unprecedented energy crisis into the moment where the world commits to an immediate, comprehensive and equitable transformation of the global energy system towards 100% renewables.