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A test for a carbon titan, as the climate debate comes back to life

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This post was written on behalf of the Australasian Centre for Corporate Responsibility, and is part of its LobbyWatch series

Not only do the wheels of climate, carbon and communications trickery keep playing out while we’re all distracted by that thing, it’s starting to feel like climate discourse is getting even more intense than it was before.

By virtue of plummeting demand for oil, the planet’s fossil fuel industries have been subject to a historically unprecedented shock ,where oil prices fell into negative territory, there is an armada of boats haunting Singapore, stacked with oil nobody wants and the large oil and gas firm BP yesterday posted a significant loss. Australia’s coronavirus recovery is, sadly, looking very likely to be fuelled by fossils, and it looks like oil and gas might be joined by thermal coal in the ‘plummeting price club’. There’s a lot going on.

Another bit of news on this rapidly expanding pile: on Thursday, Australia’s biggest oil and gas company, Woodside Energy, is set to face a test — one that is well worth paying close attention to.

What’s happening on Thursday?

The Australasian Centre for Corporate Responsibility (ACCR) presented Woodside Energy with a resolution to put a hard limit on what is known as ‘Scope 3 emissions’. These are the emissions released when customers of Woodside buy the thing they’re selling (fossil gas).

Woodside rejected ACCR’s resolution with some weak justifications. They promise the gas they sell is displacing coal, and that when gas is burnt instead of coal, emissions are lower than they otherwise would have been. Even putting aside the emissions you create when you dig gas from the ground, this ‘displacement’ story is far from true.

On Thursday, a range of shareholder advisers have urged their clients to vote against the board, and in favour of Woodside working to reduce the emissions their products create. There is a chance the vote might be quite strong.

Okay — what’s at stake?

As LobbyWatch has pointed out previously, stopping emissions is better than reducing emissions. We previously used the ‘bucket’ analogy, but Professor Katharine Hayhoe’s brick pile is great too:

This is why Woodside’s ‘scope 3’ emissions matter quite a lot. At roughly 33 million tonnes of CO2 equivalent per year, they come eighth in the top ten contributors in Australia, in terms of emissions associated with their sold products.

It is these emissions that are the primary harm associated with the company’s products. If their fuels are burnt anywhere in the world, it does not matter whether coal, wind, solar, hydro or nuclear were displaced — what matters is that bricks were thrown in the pile.

And hence, that is why reducing these emissions is so important. That pile will only get smaller over long periods of time. We need to stop adding to it.

What’s the best possible outcome?

Woodside could choose, simply, to stop clashing with investors and the broader community and begin redefining their work into something that doesn’t cause harm to human life. That would mean setting targets that realistically and rapidly spin down the extraction of fossil fuels. That seems unlikely, given its chairman, Richard Goyder, has been calling institutional investors and urging them to vote against climate resolutions.

The next best outcome would be a strong vote from Woodside’s shareholders for a stronger, braver and more direct recognition of how their business impacts the planet. We’ll wait and see how Thursday pans out, but it would nice to get some good news for once, wouldn’t it?

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Ketan Joshi

Ketan Joshi

1.8K Followers

Anecdata analysis, research, writing, caffeine. Science, tech and data communications professional in Sydney.