The Everlution Blog is devoted to discussing issues related to the ever increasing ecological footprint of human beings. If we have the determination, we can reduce that footprint, even with more population and more affluence. We have the technology to overcome human-induced climate change - the biggest issue we have ever faced. But we have to get going as our species is irreversibly altering the greenhouse gas levels that have been stable for the last 800,000 years.
In Parts 1 to 3 of this series, the impact of the current legal landscape on the viability of the fossil fuel industry was explored. It was found that whilst there have been significant legal challenges that favoured environmental lobby claims, there have also been reversals.
In Part 4 we will conclude this series by peering into the near future to come to a conclusion as to whether the law courts will ultimately end the fossil fuel industry.
Part 4:
What is the future for fossil fuel companies?
Eco Profit concludes that legal claims against fossil fuel companies can potentially lead to various outcomes, but it's unlikely that they will single-handedly stop the sale of fossil fuels altogether. Nevertheless, such claims will contribute to shifts in the industry and regulations surrounding fossil fuels.
Legal claims create risks and uncertainties for fossil fuel companies, which can affect their ability to secure financing, attract investors, and maintain shareholder confidence. This will influence their long-term viability and strategic decisions.
Other predicted impacts are:
Financial Penalties:Â Legal claims will result in financial penalties for fossil fuel companies found guilty of misconduct (for example greenwashing) or negligence affecting their profits and influencing their business practices.
Regulatory Changes: Successful legal claims will lead to tighter regulations on fossil fuel extraction, production, and emissions. This will increase the cost of doing business in the industry and reduce the attractiveness of fossil fuels compared to alternative energy sources.
Public Awareness and Perception:Â Legal battles will draw public attention to environmental and social issues associated with fossil fuel production, use and lucrative subsidy receipt. This heightened awareness will lead to more significant changes in consumer behaviour, investment patterns, and government policies.
Transition to Renewable Energy:Â While legal claims might not directly stop the sale of fossil fuels, they can accelerate the transition to renewable energy sources by highlighting the negative impacts of fossil fuel use and the urgency of adopting cleaner alternatives.
In its annual World Energy Outlook released in October 2023, the International Energy Agency (IEA) said peaks in oil, natural gas and coal demand were visible this decade in its scenario based on governments' current policies. This is the first time this has happened.
"The transition to clean energy is happening worldwide and it's unstoppable. It's not a question of 'if', it's just a matter of 'how soon' – and the sooner the better for all of us" - IEA Executive Director Fatih Birol.
Companies like Naturgy have recognised the need to transition, developing a clear strategy to 2025 to accelerate its move from a 19th century gas retailer to a renewable giant.
The conclusion is that in an increasingly heat-agitated global ecosystem, the fossil fuel industry is going to be stymied by the improvements in attribution science (linking human-induced climate change impacts directly to extreme weather events), the added carbon costs of doing business, the levelized cost of electricity compared to renewables, and disruptive technology innovation. Eco Profit predicts that there will be a series of legal claims against the fossil fuel industry and governments that will eventually be the straw that breaks the camel’s back. That is, the fossil fuel industry will rapidly decrease as electrification from renewable sources increases.
Winton has been in the carbon management industry for sixteen years. He brings his accounting skills and climate risk management expertise together to show corporations and government agencies how to adapt their financial systems to meet the new sustainability and carbon reporting requirements whilst increasing operational efficiency, productivity, and profits.