THE ECONOMIST: COP28 deal historic

The recent United Nations Climate Conference in Dubai, known as COP28, ended with a historic agreement that, for the first time, mentions transitioning away from fossil fuels. More than 190 nations were represented at the event. Although the language regarding reduction in the future use of oil, natural gas, and coal is notable, it is far from a mandate.

Major producers (OPEC+ and others) naturally resist decreased use of petroleum. Production and exports in some cases account for the vast majority of business activity, and it is difficult to contemplate eliminating the goose which is laying the golden eggs.

Countries with rapidly developing economies (including China and India) have also been reluctant to curtail usage, as such fuels are helping to enhance growth while improving living standards. Demand for energy around the world is expanding, and affordable and reliable power is essential in lifting billions of people from extreme poverty. If you just peruse the numbers, there’s not a realistic way to get there without using fossil fuels for the foreseeable future under a vast array of assumptions regarding business activity, energy prices, and carbon reduction technology.

On the other hand, some nations wanted an agreement calling for fossil fuels to be phased out entirely despite the impracticality of such a pattern. After intense negotiations, a compromise was forged.

The COP28 agreement leaves countries considerable flexibility regarding how they achieve climate goals, and it’s certainly not going to eliminate fossil fuels usage. However, valid scientific research clearly indicates that we have a legitimate climate crisis and a closing window for addressing it. Perspectives differ dramatically, with the pragmatic solution being to strive to both assure adequate energy supplies and aggressively address environmental concerns.

Clearly, fossil fuels must be produced and consumed responsibly and with the lowest carbon footprint possible. Fortunately, Texas is not only a leader in oil and gas, but also in lower-carbon oil and gas and in technologies to reduce the carbon footprint further at every stage of production. The state also continues to embrace wind and solar power, as well as emerging alternatives such as hydrogen. Additionally, Texas is prominent in carbon capture and other initiatives to effectively address climate issues.

The COP28 agreement is certainly historic and could have a profound and positive impact. However, we must keep it in perspective and recognize it does not remotely suggest that fossil fuel usage is about to diminish. In fact, recent projections from our firm, the Department of Energy, and others suggest that we will be using more fossil fuels in 2050 than today. Energy to support global prosperity and a livable planet are both laudable (indeed, indispensable) goals. We can (and must) achieve both! Stay safe!