The Struggle Between the Need For Climate Action and the Drive to Make Profit.

Written by Alex Wondra

Edited by Tiffany Zhang

Design by Katelyn Chow

In 2015, representatives from around the world gathered in Paris for the UN Climate Change Conference (COP21), and signed into effect the Paris Agreement. It was a historic international treaty with the ambitious, but vital, goal of limiting the increase in global average temperatures due to climate change under 1.5 degrees celsius, compared to the pre-industrial average. The UN’s Intergovernmental Panel on Climate Change (IPCC) indicated that a failure to reach this limit would mean droughts, heatwaves and crop-failures around the world because of far more alarming climate change impacts. 

Naturally, more money and effort has been put into transitioning from traditional fossil fuel energy sources to renewable sources, such as solar, wind and nuclear. According to the International Renewable Energy Agency (IRENA), global annual investment in renewable energy increased to 500 billion USD in 2022, from 240 billion USD in 2013 (“Investment”). In Australia alone, one of the largest polluters per capita, around 4000 megawatts of solar panel capacity was installed in 2023 (“2. State of Total Renewables”). Additionally, great strides have been made in transportation electrification and energy storage technologies.

At the same time, a new way of mitigating carbon dioxide emissions called Carbon Capture and Storage (CCS) has been identified as crucial for reaching the goal set out in the Paris Agreement; this works by filtering carbon dioxide from the atmosphere or from fuels before they are burnt, then storing the carbon as a liquid or solid. CCS is an especially important way the Paris Agreement plans to achieve its goals, because it can offset the emissions in essential sectors such as transportation and agriculture, and it can be retrofitted onto existing facilities such as refineries and power plants.

In July 2023, the European Centre for Medium-Range Weather Forecasts (ECMWF) reported the global average temperature for the month to have the highest record ever. Subsequently, the ECMWF detected that the August of 2023 had the second warmest global average temperature: around 1.5°C warmer than the preindustrial average for August 1850-1900 (“Surface Air Temperature for August 2023”). Then, in both September and October of 2023, the ECMWF found a similar trend, with temperature anomalies of 1.75°C and 1.7°C warmer than 1850-1900, respectively (“Surface Air Temperature for September 2023”).

Even though the Paris Agreement’s limit of 1.5°C annual average temperature anomaly has not been breached yet, it is likely that it will happen in 2024, especially with the El Niño trade wind cycle shifting into the warmer phase, compounding the decreased solar dimming effect of COVID related slowdown in transport and manufacturing pollution. So far, no countries are on track to meet their goals for the Paris Agreement, and only 9 are “almost sufficient”, according to Climate Action Tracker.org (“Countries”). The United Nations Framework Convention on Climate Change (UNFCCC) states: “climate change action needs to be massively increased to achieve the goals of the Paris Agreement” (“The Paris Agreement”). Most people would argue our attempt to accelerate the rate of decarbonisation and energy transition is not fast enough to achieve a functioning climate.

Despite hundreds of billions of dollars invested into the development and roll-out of renewable energy, the carbon emissions of the world’s energy sector continue to rise. During the Industrial Revolution of the 1860s, English economist William Jevons observed something similar, where innovations that made coal use more efficient had counter-intuitively increased the consumption of coal. This phenomenon, Jevons’ Paradox, occurs when the price of a product, typically fuel, is reduced by an increase in efficiency, which drives down its price and drives up its demand. 

While the traditional sense of Jevons’ Paradox is probably at play here as well, a slightly different interpretation of it also explains how renewable energy and carbon emissions simultaneously increase. We live in a society where almost everything, government or private sector, is mainly driven by profit incentive. When renewable energy development is treated as an investment to increase profits, institutions supplement fossil fuels with renewable energy. Rather than replacing fossil fuel energy sources, new renewable energy is going to meet the ever-increasing energy demand, which is projected to increase another 1.8% in 2024 (“Energy outlook 2024” 1).

For example, with the election of Australian Labour in the 2022 federal election, as well as falling energy prices, 2022 saw an immense growth in renewable energy installations. Origin Energy, an energy company, planned to close down the Eraring coal fired power plant, the largest in Australia, 7 years before scheduled in 2025, because a fall in energy prices and green energy subsidies made it unprofitable. The year saw 5.3 gigawatts of renewable energy capacity added to the Australian National Energy Market (NEM) (“2. State of Total Renewables”). However, the Russia-Ukraine war and other supply chain disruptions led to a jump in energy prices and along with a fear that renewable energy would not come online fast enough for a projected hot and dry summer made the New South Wales (NSW) government reconsider the closure of the Eraring power plant. Because the Australian government’s renewable energy strategy is driven by profit, when an increase in energy prices made it profitable to keep fossil fuels, it quickly did so. When Australia’s fossil fuel access was threatened, the government doubled down on its reliance on fossil fuels for the foreseeable future, rather than achieve energy security and independence with renewables.

Because the transition to net zero emissions in Australia and other countries is driven by investment and profit, reducing costs comes before reducing emissions. Since CCS can make fossil fuels that are economically more viable and efficient than renewables “green”, it has been pursued by governments and fossil fuel companies as a way to generate energy with reduced emissions, without too much investment or risk in renewable sources. The world’s first CCS project, the Sleipner West field in the North Sea, was opened in 1996, and is operated by the Norwegian petroleum company Equinor. Often, CCS projects are operated by fossil fuel corporations near oil or gas fields, where they capture the emissions from releasing and processing fossil fuels, and they receive funding from national governments so they can meet their climate targets. Unfortunately, these targets are usually not met, and public funding that could have gone to renewable energy is squandered.

In 2000, the IPCC projected that by 2020, there would be 100 large scale CCS projects around the world (Metz 27). Today there are only 13 (Beer). The world’s largest CCS plant is the Gorgon natural gas plant operated by Chevron. It is located about 50 kilometres off the coast of Western Australia, on Barrow Island. After the Gorgon and Jansz-io gas fields with a combined 40 trillion cubic feet of gas were discovered in 2009, the Federal Minister of Environment Peter Garrett approved the construction of the $300 billion project (“Jansz-Io Gas Field”; Arup). 

The Australian government gave $60 million to Chevron and required them to capture at least 80% of the carbon dioxide emissions due to gas extraction refining at the plant, starting in 2016 (Readfearn). Even though gas production and exportation began in that time period, due to technical issues (including a sand clog up) carbon dioxide capture did not begin until 2019. The same year in 2016, Australia’s national emissions increased by 6.8Mt of carbon dioxide, and Gorgon’s gas production emitted about 4Mt of carbon dioxide, meaning that more than half of Australia’s national increase in emissions were caused by the extraction of liquid natural gas at Gorgon alone (Swann 3). As of 2021, the Gorgon project has captured around 5Mt of carbon dioxide, around 30% of the emissions caused by gas processing, short of the 80% limit set by the Australian government (Swann 3). This is barely 2% of all the emissions from the Gorgon plant, including the carbon dioxide released when the gas is finally burnt (Readfearn). Chevron kept 100% of the $60 million the Australian taxpayers gave them to build CCS, even though very little carbon dioxide was actually stored (Weyler). 

Similar failures occurred at other CCS plants across Australia and around the world. For instance, in 2014, the Canadian government spent around $1.35 billion retrofitting CCS into the Boundary Dam coal power plant (King). Over the course of its lifetime, the Boundary Dam CCS plant has had a target under-performance of about 50%, and is planned to shut down in 2024 due to “serious design issues”, according to SaskPower, the operator of the plant (Muffett 23). In Kemper, Mississippi, Southern Company planned to transform a lignite coal power plant into a “clean coal” plant. The project started construction in 2010 and was planned to finish in 2014, but was years late, and vastly over-budget, reaching a bloated $7.5 billion spent (Kelly). It was finally cancelled in 2017 because of poor management and major structural problems.

In total, large scale CCS projects around the world captured about 39Mt of carbon dioxide in 2021, about one one-thousandth of the 36Gt of total global carbon dioxide emissions of that year (Beer). According to the Australia Institute, of the various targets set by international organisations such as the International Energy Agency (IEA), the IPCC, and the Council of the European Union, CCS projects around the world have failed to achieve a single one (Browne 4). 

A huge reason why CCS rollout has been slower and smaller than projected is because CCS projects tend to be extremely expensive. This is because CSS technology is relatively new and expensive and needs regular maintenance, while subsidies are often insufficient or inconsistent. Carbon needs to be stored somewhere: right now, it is stored deep down in geological formations, which are hard to come by, but technological innovations are being made to store carbon more efficiently as a liquid or solid. Furthermore, plants make revenue from selling carbon credits to other institutions so they can label themselves “carbon-neutral”, but the market for these often fluctuates and is much smaller than the investment put into CCS in the first place. According to the Commonwealth Scientific and Industrial Research Organisation (CSIRO), brown coal, black coal and gas with CCS energy sources are more expensive per kilowatts than wind, rooftop photovoltaic and large scale photovoltaic energy systems (Graham 17).

CCS’s two birds - storage and profitability - are killed by one stone: Enhanced Oil Recovery (EOR). EOR is a technique that captures oil that is usually out of reach by traditional production methods by injecting carbon dioxide gas into oil and gas fields to displace fossil fuels, which is then pushed into oil wells. EOR allows oil companies to access fossil fuels that would otherwise be left in the ground. According to the Institute for Energy Economic and Financial Analysis, 73% of all carbon dioxide captured by CCS is used for EOR (Robertson). Carbon dioxide is easily stored in oil and gas deposits and money is made from selling the extracted fossil fuels. Obviously, this is deeply problematic for CCS as a technology that aims to reduce carbon dioxide emissions and take urgent climate action. About two-thirds of oil and gas fields are fossil fuels that are only accessible using EOR, and since carbon dioxide gas is less dense than oil and natural gas, when the recovered fossil fuels are burnt, more emissions are released into the atmosphere than if the carbon wasn’t captured in the first place. CCS as a technology to reduce the impact of unavoidable fossil fuel use has been hijacked by fossil fuel corporations as a way to greenwash their failure to take climate action and make more money.

In conclusion, our society’s focus on economic growth and fixation on profit making hinders genuine climate action to reduce carbon dioxide emissions and fossil fuel reliance. The contradiction between the increasing need for drastic climate action and the ever-present capitalist mode of production creates failures in climate policy and technology like the green energy transition and CCS. Only by deprioritising economic growth at all costs can we begin taking expensive and radical but crucial steps to reducing the negative impact humans have on the natural environment.

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