Ground Floor:The report from the Intergovernmental Panel on Climate Change last week concluded that people are responsible for global warming and our past actions may have effects for centuries to come. It has become a chain reaction which we can't stop; we can only modify our behaviour so we don't make things even worse, writes Sheila O'Flanagan
Of course modifying our behaviour means taking a certain level of responsibility for our actions and admitting that we are part of the problem - which seems to be the hardest thing for most of us to do.
US energy secretary Sam Bodman said the debate on climate change must be a discussion. Bodman's discussion would also deal with his concern that mandatory emission reductions could harm the US economy and cause businesses to relocate to areas where they can happily spew out carbon.
As the US is responsible for about a quarter of all carbon emissions and a quarter of all oil consumption, that's a lot of US factories with the potential to move production to other countries to take advantage of a looser emissions regime.
Western corporations complain - as Bodman points out - that mandatory regulation on emissions will make them less competitive compared to businesses in countries where no mandatory caps are in place. And those countries rightly point out that the West has had all of the advantages of industry so why should we lecture them about the environment?
In India, an economy which many analysts now speak of in the same breath as China when looking at growth potential over the next few years, a spokesperson for the ministry of environment and forests pointed out that the report didn't commit governments to any specific course of action at all.
Politicians also continue to discuss the potential benefits of carbon trading but the concept is a vexed one, since all that does is shift the ownership of pollution rather than cut it altogether.
But while the experts (and lots of ordinary people who are lectured by their children about sustainable energy) worry about the future of the planet, the energy companies are congratulating themselves on some record results for 2006.
Most of the attention focused on Exxon Mobil which reported the biggest recorded annual profit for a US corporation last year - net earnings of $39.5 billion, an increase of $3.4 billion on last year's number which itself had been a record.
That means that the company earned more than $75,000 a minute in 2006. Royal Dutch Shell also posted record profits of $25 billion, an increase of $5.5 billion. In fact Exxon Mobil, Royal Dutch Shell, Marathon Oil and Valero Energy which all reported record levels of profitability earned a combined $75.6 billion in 2006. You'd think the oil companies would be just slightly embarrassed at their overflowing coffers but Shell has (almost inevitably) warned that the outlook isn't so good. The trouble spots which drove up prices and made so much money for them are still troublesome and so they predict oil production will probably remain unchanged in the next couple of years (although they also expect significant growth once again by 2010).
Despite that bit of hand-wringing from Shell, most analysts think 2007 will be another good year for the energy companies whose share prices naturally moved higher after the profit announcements.
The massive amounts earned over the year sparked a demand for windfall taxes by some politicians but the companies insist that they need the funds for further exploration and production.
Despite a plethora of US senators complaining that the Bush administration has stacked the deck in favour of the oil giants, the companies point out that demand for oil continues to rise and they need to find more and better ways of extracting it.
Exploration is a risky business, they say, so they (and their shareholders) should be rewarded.
And that's one of the issues as far as climate change and human behaviour goes. The scientists are pretty much telling us that we should switch to other energy sources. The oil companies, on the other hand, are making excellent profits from the ones that we have because of ever-increasing demand. Their shareholders are a happy bunch and while all of them would agree that they want a sustainable planet and stable weather systems, none of that cuts much mustard on Wall Street. No chief executive is going to see double-digit compensation packages for maintaining the habitat of the polar bears, no matter how desirable that might be.
Then there's the political problem. If they decide to cap emissions and a company moves elsewhere to take advantage of less regulation, the gain to the planet is zero but the loss to the country concerned in jobs and economic output could be significant. And from the point of view of the politician concerned, one of those jobs is his or hers. In any event, a profitable oil industry is also a boost to government coffers and there hasn't been a government yet that can't spend extra money.
On the other side of the energy supply chart are the renewable or alternative energy companies. In the summer of 2006, when oil prices hit their peak and everyone talked about alternative energy, ethanol companies were all the rage. But their performances have been lukewarm in comparison with the oil giants - indeed anyone who bought VeraSun at $30.75 just after it came to the market is nursing a $13 loss at the moment. And hydrogen enthusiasts will be feeling a bit scorched by a 60 per cent fall in the share price of Hydrogenics.
The cold reality is that until it becomes seriously profitable for producers and investors alike to be involved in alternative energy production only the climate will change.
www.sheilaoflanagan.net
