Carbon Neutrality in Crisis... Record High Greenhouse Gas Emissions Since War Outbreak [Ukraine Shockwave⑨]

[Photo by AP Yonhap News]

[Asia Economy Reporter Park Byung-hee] Last year, new governments that successfully changed regimes took office in both the United States and Germany, the two major Western powers. Both new administrations set strong climate change response and eco-friendly policy promotion as national agenda items.

U.S. President Joe Biden declared on his inauguration day, January 20 last year, that the U.S. would rejoin the Paris Climate Agreement, which former President Donald Trump had withdrawn from. A week later, he signed an executive order halting drilling operations for oil and gas extraction on federally owned lands. German Chancellor Olaf Scholz formed a coalition government led by the Social Democratic Party for the first time in 16 years by partnering with the Green Party. The coalition pledged to shut down coal-fired power plants by 2030 as a flagship eco-friendly policy, advancing the previous target set by Angela Merkel’s administration by eight years from 2038.

Since the outbreak of the Ukraine war on February 24, the flagship eco-friendly policies actively promoted by the new governments of the U.S. and Germany have been faltering. When the nationwide average gasoline price in the U.S. surpassed $4 per gallon, President Biden resumed federal land leasing for oil and gas drilling in April. The German federal government announced on the 16th that it would temporarily expand the operation of coal-fired power plants. There is growing concern that carbon neutrality policies aimed at combating climate change are now at risk due to the Ukraine war.

◆ Fossil Fuel 'Gold Rush' = The British BBC reported on the 8th that a fossil fuel 'gold rush' is underway due to the Ukraine war. With energy security becoming urgent, the focus has shifted from the long-term goal of transitioning to eco-friendly energy to the immediate search for alternative fossil fuel resources. European countries have signed successive contracts to import liquefied natural gas (LNG) from the U.S. and the Middle East to replace Russian energy, and investments in fossil fuels have begun to revive.

As demand for fossil fuels surged, international oil prices surpassed $130 per barrel in early March, shortly after the war broke out, reaching a 14-year high, and have remained in the triple digits. European natural gas prices are trading at 129 euros per MWh, more than six times higher than a year ago.

Coincidentally, a report has emerged that greenhouse gas emissions reached an all-time high after the outbreak of the Ukraine war.

According to the Scripps Institution of Oceanography (SIO) in San Diego, California, the carbon dioxide emissions measured at Hawaii’s Mauna Loa volcano in May reached 421.37 ppm, surpassing the previous all-time high of 418.95 ppm recorded in May last year. The scientific community explains that to maintain a healthy state of the Earth, carbon dioxide emissions should be kept below 350 ppm.

The United Nations World Meteorological Organization (WMO) and the UK Met Office analyzed in a report released on the 10th of last month that there is a 48% probability that the Earth's temperature will rise more than 1.5 degrees Celsius above pre-industrial levels within the next five years. This was a warning that the Paris Climate Agreement is in jeopardy. The world, through the Paris Climate Agreement, set a goal to keep the Earth's temperature rise below 2 degrees Celsius compared to pre-industrial levels, preferably within 1.5 degrees. The 1.5-degree target at the time of the Paris Agreement was based on a long-term average, so reaching 1.5 degrees within five years does not necessarily mean the threshold of the Paris Agreement has been reached. However, the Intergovernmental Panel on Climate Change (IPCC) pointed out in a report released last year that the long-term average could exceed 1.5 degrees within 20 years. Currently, the Earth's temperature is 1.1 degrees higher than pre-industrial levels.

Currently, major developed countries such as the U.S. and Germany have set 2050 as the target year to achieve carbon neutrality. However, skepticism is widespread. A survey by consulting firm Bain of over 1,000 corporate executives found the average expected year to achieve carbon neutrality was 2057. One-quarter of respondents predicted that achieving carbon neutrality by 2070 would still be difficult.

◆ Voters Favor 'Eco-Friendly'... Carbon Neutrality May Accelerate = As greenhouse gas emissions increase, the voices of voters urging climate change action are also growing louder. The American public rejected the re-election of Trump, who withdrew from the Paris Climate Agreement, and the German public gave the Green Party an opportunity to participate in government. In the German federal election on September 26 last year, the Green Party recorded its highest vote share of 14.8% since its founding in 1993, ranking third after the two major parties. Although the German federal government recently announced an expansion of coal-fired power generation, it is only a temporary measure. The pledge to phase out coal-fired power plants by 2030 remains valid.

Recent elections in Australia and Colombia also confirmed that eco-friendliness is an unstoppable trend in politics.

Recently inaugurated Australian Prime Minister Anthony Albanese and Colombian President Gustavo Petro have pledged to address climate change.
Photo by AFP Yonhap News

In last month’s Australian general election, the Labor Party regained power after nine years. During its previous administration, in July 2012, the Labor Party introduced a fixed-price carbon tax requiring the top 500 carbon-emitting companies to pay 23 Australian dollars per ton. The Labor Party lost the general election in September the following year, and the newly elected Liberal-National coalition repealed the carbon tax in July 2014, just two years after its introduction. With Labor back in power, decarbonization policies are expected to be reintroduced.

Earlier this year, eastern Australian states such as Queensland and New South Wales experienced the worst flooding in history, making climate change response a major issue in the Australian general election. Newly elected Prime Minister Anthony Albanese announced plans to limit corporate greenhouse gas emissions through a carbon emissions trading scheme and to raise greenhouse gas reduction targets.

In this month’s Colombian presidential election, Gustavo Petro, who won and became Colombia’s first leftist president, pledged strong climate change action that opponents described as economic suicide. President-elect Petro announced plans to halt new oil exploration and to work to prevent destruction of the Amazon. He also emphasized that cooperation with the U.S. would focus on climate change response.

Consulting firm McKinsey assessed that while the Ukraine war will clearly complicate the transition to eco-friendly energy in the short term, it could serve as a turning point that accelerates the transition by spreading the recognition that energy security is economic benefit in the long term. McKinsey explained that historically, conflicts have often accelerated energy transitions: 19th-century naval battles shifted ship propulsion from wind to coal; World War I triggered a shift from coal to oil as an energy source; and World War II led to nuclear power becoming a major energy source.