BHP Billiton’s membership of a new coalition of high powered commerce with the lofty aim of assisting the transformation of emerging nations into low carbon economies says much about the gathering pressures of climate change on those who make money in the fossil fuel cycle and just as much about the Global Australian’s radically changed view of its place in the world.
BHP was formally invited to become a foundation member of an “energy transitions commission” in a letter to chief executive Andrew Mackenzie penned by Royal Dutch Shell boss Ben van Beurden.
The Shell initiative, which will be formally announced in Houston on Monday, has been made all the more timely by China’s confirmation that it is contemplating the imminent introduction of a cap-and-trade carbon trading scheme and of stricter limits on the level of public funding for “high carbon projects”.
This is patently a deeply worrying development for big coal. China’s economic development is powered by electricity and that means it sits front and centre to any and all the optimism that the miners can muster about the medium and long-term outlook for coal.
Organisations like the World Coal Association are forever cycling comforting International Energy Agency data that says China has 126 coal fired power stations under construction and plans for another 639 more of them. And, for good measure, that India is finishing off 177 new coal units while a further 539 sit on the drawing board.
Of course, a whole lot of what is promised by the IEA forecasts will play out and coal surely will play a cornerstone role in the transition of these economies and many more as billions of people around the globe join the middle classes.
But it rather looks like flaring strategic tension between the US and China has produced a balming alliance between Presidents Obama and Xi on ever firmer action aimed at containing carbon emissions in the name of preventing climate change.
Plainly the Presidents Two have announced their aligned emissions intent ahead of the next big global climate change summit in Paris and that creates the potential that the world will emerge form December’s gathering with something more meaningful and binding than might have been anticipated just a week ago.
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