There are, as you might imagine, a number of problems with this argument. Among them being that they’ve not got the climate science right here, they’ve not got the economics of climate change right and they’ve not even managed to work out why the oil companies are willing to risk this capital.
Here’s the argument in a nutshell:
That’s the sum the industry may spend on developments that need market prices of at least $95 a barrel to break even, the Carbon Tracker Initiative said. The money risks being wasted as the total amount of oil the world can afford to burn without warming the planet to unsafe levels is available from less costly deposits that are economical at $75 a barrel, according to its report.
Backing that up they say:
World governments aim to devise by the end of next year an agreement to ensure the global average temperature rise since industrialization began is capped at 2 degrees Celsius (3.6 degrees Fahrenheit). That would entail a maximum of a further 900 gigatons of carbon-dioxide emissions, of which 360 gigatons could come from burning oil, according to Carbon Tracker.
To begin with the science of climate change doesn’t say anything at all about trying to limit temperature rises to 2 oC. That’s a political target, one entirely created by the activists lobbying governments. So this isn’t a hard target at all: it’s an entirely made up and political one.
Oh, and we might also note about the climate science: the figure for climate sensitivity keeps being massaged down. That allows for greater emissions for any particular temperature rise.
Secondly, the economics of climate change are entirely against setting a temperature limit at all. We went through this with the Stern Review as well as all of the other work (Nordhaus, Tol) that has been done on the subject. We want to set a cost limit to how we deal with climate change, not a temperature one. If climate change is very expensive to deal with then we want to have more amelioration of climate change and less adaptation to it. If climate change is very expensive to prevent then we want to have less prevention and more adaptation to it. For the aim is to make the maximum number of human beings as well off as they possibly can be over time. Thus we want to do whatever is the cheapest of the two at any one time: prevent or adapt to. It is all about the price of both costs and benefits, not about one single temperature target.
Finally, there’s the misunderstanding about what the companies are doing. Even if we accept everything that is being said about the temperature targets and even that governments are going to try to hold everyone to them. It could still be entirely rational (and profitable) for companies to go after that extra oil. For the assumption that governments are going to try to do something about it is not the same thing as stating that governments will be effective at doing so. So, if you don’t believe that governments really will restrict the amount of oil that can be burnt in the future then it’s entirely logical to continue to prepare to drill it up.
And, if truth be told, we have evidence that the Carbon Tracker Initiative doesn’t believe that there will be those effective limits either. If they did they could just sit there and watch all those filthy capitalist fossil fuel barons lose all their money. No doubt to the great enjoyment of the people at the CTI. That they’re making a song and dance about it now is, or could be, evidence that they’re not all that sure themselves that the limits will be imposed in a manner that works and so they’d better expend their efforts on some other manner of achieving the same goal. The very existence of this campaign is evidence that they don’t think that hard caps on the usage of fossil fuels will ever be imposed.