ExxonMobil warns carbon emissions will rise by 25% in 20 years

By John Vidal

ExxonMobil, the world's largest oil company, expects global carbon emissions to rise by nearly 25% in the next 20 years, in effect dismissing hopes that runaway climate change can be arrested and massive loss of life prevented.

According to the company's annual Outlook for Energy report – due to be published in the next few weeks –

demand for power will increase by nearly 40% in the next 20 years, lifting emissions by around 0.9% a year at least until 2030.

Beyond 2030, it says, any progress on cuts will require "more aggressive gains in energy efficiency as well as the use of less carbon-intensive fuels. New technologies will by then be essential.".

"It is a significant rise [in emissions], but it is substantially slower because of [expected] improved efficiency and a shift towards lower carbon fuels," says the report, previewed today at the World Future Energy conferencein Abu Dhabi.

The projections by Exxon scientists are gloomier than anything publicly expressed by governments and scientists, who maintain that global emissions can be reduced significantly and catastrophic climate change be averted if action is taken for them to reach their "peak" in the next 10 years.

According to the UK Met Office, if emissions rises can be stopped by 2020 and then be made to reduce by 1-2% a year, the planet could be expected to warm 2.1C to 3.7C this century, with the rise continuing even higher after 2100.

But Exxon, which until 10 years ago was sceptical that climate change could be even caused by man-made emissions, said emissions will continue to rise significantly with very little reduction in fossil fuel use.

"In 2030, fossil fuels remain the predominant energy source, accounting for nearly 80% of demand. Oil still leads, but natural gas moves into second place on very strong growth of 1.8% a year on average, particularly because of its position as a favoured fuel for power generation.

"Other energy types – particularly nuclear, wind, solar and biofuels – will grow sharply, albeit from a smaller base. Nuclear and renewable fuels will see strong growth, particularly in the power-generation sector. By 2030, about 40% of the world's electricity will be generated by nuclear and renewable fuels."

The company does not say what it expects global oil output to be in 2030, but suggests that US demand will be roughly at 1960 levels, suggesting that the US will have reduced its dependency on foreign oil considerably.

Instead, it says that growth in CO2 emissions in the future will be dominated by China, India and other developing, or non-OECD countries.

"Non-OECD countries' emissions surpassed OECD emissions in 2004; by 2030, non-OECD countries will account for two-thirds of the global total. Meanwhile, OECD emissions will decline by about 15% on today's figure, and by 2030 will be down to 1980 levels."

Source: http://www.guardian.co.uk/environment/2011/jan/19/exxonmobil-carbon-emissions-rise?CMP=twt_fd

NUTSHELL:

Governments and corporations alike must factor in C02 regulations  as a significant consideration for their energy plans for the future. This is because regulations determine the extent to which the environment is impacted by business as well as the attractiveness index for business in a particular country. Also, Corporations must ensure that carbon costs- eg carbon credits (even if they are contingent) must be factored into cashflow projections because- even if they do not exist today, they will be a reality in the future. In short, as carbon emissions rise over the next 20 years, expect carbon costs to rise.