Why the world is quitting oil faster than coal – #139

Iran; Pumped storage projects in India; Sustainability reports; and more.

The Big Picture

And now for something completely different.

Last week, this newsletter read a takedown of Britannia’s sustainability report.

In brief, its ad agency had created an outdoor ad campaign to talk up the FMCG major’s commitment to sustainability. Britannia, said a clutch of six hoardings with a tree in front, took environmental stewardship seriously. To underscore that point, the campaign traced its copy around these trees, as opposed to lopping off branches. “Each tree bent or curved the brand name differently, highlighting a different milestone in Britannia’s sustainability report,” said the agency’s entry for the Cannes Lions. This idea, said the agency, could save as many as 20,000 trees across India.

In her Substack post, Polina Zabrodskaya took a closer look at the campaign — and found greenwashing. “Love a good sustainability report,” she writes. “So I did what most agencies don’t: I read it. It’s 302 pages long, which makes finding the key numbers an insane challenge. I studied it anyway – out of morbid curiosity.”
The whole post, which touches on Britannia’s water stewardship, energy consumption and plastic neutrality, is worth a read. Here is Plastic Neutrality:

“Britannia claims “Plastic neutrality” through Extended Producer Responsibility (EPR) — an offsetting scheme — meaning that for the amount of plastic it introduces into the market, an equivalent amount of plastic waste has been collected and ‘responsibly processed’. Nobody really knows what’s behind the mysterious phrase ‘responsibly processed’. Could be like-for-like recycling, could be incineration. But here’s the best part: Britannia’s own plastic waste generation increased from 3,398 MT in FY23 to 4,858 MT in FY24 (page 122). So, in 2024, while Britannia saved six trees from being trimmed to celebrate ‘different milestones’ in its sustainability report, that same report shows a nearly doubled absolute water withdrawal, significantly increased energy consumption from non-renewables, a decreased share of renewable electricity, expanding CO2 emissions, and increased plastic waste generation.”

Much climate reporting focuses on the energy sector and large emitters. For this reason, Zabrodskaya’s post is worth reading. Hardwired into it are ways of broadening climate reportage.

News of the week

It was another week when history moved so fast the world got whiplash.

The previous instalment of this newsletter had said: “Last week, Israel attacked Iran, saying the latter was close to acquiring nuclear weapons”; alluded to sources calling the claim farcical; and closed by wondering what would follow.

Answers have not been long in coming. The US has bombed three nuclear facilities in Iran. As this newsletter gets written, Iran is weighing its responses; the rest of the Middle East is wondering if it will be drawn into this conflict; oil markets are jittery, as is the rest of the world. As in the past, Trump’s air raid is unilateral, lacking sanction from both the US Congress and international bodies. This is one more sign, in a long list of recent signs, that the global rule-based order, weak as it was, has now been entirely heaved to the side. This is a new, dog-eats-dog world. (NEWSFLASH: As this newsletter was getting finalised, Trump announced a ceasefire between Iran and Israel. Whew)

As with Trump’s tariffs, the question is whether weaker nations coalesce or get swept into blocs aligned to either the USA or China. Faced with such questions, other developments feel quotidian. As the FT wrote about the US, Israel and Iran: “There is only one story in markets, and the broader world, today.”

And yet, the earth spins along. And so, here are some of the other major developments from last week.

The US’ clean energy sector is facing a wave of collapses as Congress weighs a spending bill that would gut clean energy tax credits that have kept the industry afloat, reported the FT. “Two major companies, residential solar provider Sunnova and financing firm Mosaic, filed for bankruptcy this month, with Sunnova citing “uncertainty over the nation’s commitment” to solar power as a factor in its failure,” wrote the paper, adding: “There have been nine big clean energy bankruptcies this year, with corporate failures on track to outpace the 16 that filed in the sector last year.”

Needless to say, the US is the world’s biggest consumer of energy. And this wave of closures comes at a time when, as another FT report told us, record-high greenhouse gas emissions are set to exhaust the planet’s “carbon budget” within three years, passing another ominous milestone that would minimise the chance of limiting warming to 1.5°C.

That is correct. The carbon budget for 1.5°C will be exhausted in three years.

In response, however, the US is shuttering RE firms. And the world is getting off oil faster than it is exiting coal. As a very interesting FT report pointed out last week (you will find it in longreads as well), mobility is electrifying faster than the electricity sector is decarbonising.

In these two FT reports, the contrast in quotes is striking. “Others are more blunt, saying the IEA’s forecasts were obviously wrong. “I just looked at those forecasts and thought they were nuts,” says Tom Price, commodities analyst at Panmure Liberum. Price expects that coal use will keep ticking up by about 0.5 to 1 per cent each year. “Over a very long timeframe, coal is a dying industry, but it is not going to die within 5-10 years as people expected,” he says.

In contrast, here is oil. “‘There’s no doubt that in the grand scheme of things, this is a sunset industry,’ says Paul Gooden, head of natural resources at asset manager Ninety One. ‘We can debate how far the sunset is away, but companies need to recognise that — and increasingly they are recognising that.’ László Varró, Shell’s head of scenario planning, echoes the sentiment. ‘There is very little doubt that peak oil demand is coming,’ he says.”

Some of the ripple effects from the US’s attack on RE firms will be felt in India.

Writing for Nikkei, Ritesh Kumar Singh takes exception to the oft-repeated claim that Trump’s tariff war spells opportunity for Indian solar manufacturers. Not only is the US favouring its domestic solar industry, he says, by focusing too much on exports potential, India is overlooking the possibility that ASEAN countries “may redirect their solar cell and module exports to India, taking advantage of zero import duties under the ASEAN-India Free Trade Agreement—potentially leading to a surge in imports from the region”. The question, as ever, is whether India will spin this into an opportunity and decarbonise faster — a la Pakistan — or embrace protectionism tighter.

In other news, Delhi hit an incredible 54.4°C on the heat index. It wasn’t, obviously, the only place in north India to be hammered. “Along with Delhi, a large part of northwest India was hammered as well. “Today, heatwave conditions prevailed at a few places, with severe heatwave conditions at isolated places in Rajasthan, heatwave to severe heatwave conditions in Haryana, heatwave conditions at a few places in Punjab, at isolated places in Madhya Pradesh and Delhi. Heatwave to severe heatwave conditions are likely to continue over northwest India, including the western Himalayan region, on June 13 before the heat comes down," an India Meteorological Department (IMD) official told Times of India.

While on climate change. Read, too, this dispatch from Uttarakhand.

State failure was a principal theme of the week gone by. Uttar Pradesh is shutting government schools.

Also in the state, local officials have been swapping Aadhaar details in the system — using illicit beneficiaries’ details for disbursals and replacing their details with those of genuine beneficiaries when sending reports to the government. In response, UIDAI is mulling fresh firewalls, like biometric devices that verify fingerprints only when live blood flow is detected. UP is not the only one. Even Tamil Nadu, touted for so long as progressive and welfarist, has rolled out a facial recognition system for pregnant women covered under its Integrated Child Development Services scheme.

The reasons for underdevelopment in India are rooted in poverty, caste, religion and gender. Unable/unwilling to address complex problems, governments fall back on tech-fixes and waste further time and money.

And finally, now that we are talking about misgovernance, read this poignant report from Manipur on why the family of Lalnunthem, the airhostess from Kangkokpi who died in the Air India crash in Ahmedabad, didn’t bring her home through Imphal. “The Manipur government had made arrangements to receive her at Imphal airport. A press release was issued, security was promised, and coordination was pledged. Civil society groups in the Valley called for a respectful welcome. The state was prepared for a ritual of closure. However, Lamnunthem’s family—displaced, disillusioned, and doubly exiled—chose another path, refusing both the ceremony and the route. It was a decision made in sorrow and a verdict on the state of affairs.”

The fight against climate change, as this newsletter keeps saying, is not just about the energy transition. Much of it is also about boosting communities' resilience against shocks and stresses. This week, we had heat stresses; communities struggling to claim their welfare entitlements and fissuring under ethnic politics. Little of this bodes well.

What is happening with India’s Pumped Storage projects?

The good folks at Prayas have a small paper on how India’s plans to push pumped storage are progressing.

Climate longreads of the week

1. This time it's serious: How kiranas are fighting back (The Cap-Table)

2. Threat in Your Medicine Cabinet: The FDA’s Gamble on America’s Drugs (ProPublica)

3. Can Mukesh Ambani engineer a smooth transition at Reliance? (FT)

4. Why the world cannot quit coal (FT). Also see this: Big Oil faces up to its sunset era (FT)

5. Why Big Tech cannot agree on artificial general intelligence (FT)

6. China's chokehold on rare earths & its impact on India (and others): How did the rare earth magnets issue arise? How does this impact India? What steps can India take in the short to long term to address this challenge? (Shreyas Shende’s Substack)

7. Gorongosa — how a national park destroyed by civil war is bouncing back. Once home to guerrillas — for whom it offered an airstrip and a plentiful supply of free-range meat — the Mozambican park has made a remarkable recovery (FT)

8. China made millions of drones. Now it has to find uses for them (FT).

9. How Mark Zuckerberg unleashed his inner brawler (FT)

10. Chellanam’s fading hope: How incomplete sea defences are sinking a coastal area in Kerala (News Minute)

11. India’s Great-Power Delusions: How New Delhi’s Grand Strategy Thwarts Its Grand Ambitions (Foreign Affairs)

12. Scientists Discover First Known Sea Spider Species That ‘Eat’ Methane With the Help of Bacteria (Smithsonian)

Book of the week

Given Iran is back in the news, our books this week include some we have alluded to earlier.

For a longer-term account of US meddling in the Middle East, you cannot do better than read Robert Fisk’s The Great War for Civilisation and Night of Power. For a more granular look at the politics between Saudi Arabia and Iran, try Kim Ghattas’ Black Wave.

That said, the prelude to war — or any attack — is dehumanisation. And so, there is also Reading Lolita in Tehran, by Azar Nafisi. A professor of literature, Nafisi returned to Iran during the revolution and taught at the University of Tehran. Read this book to see how ordinary Iranians are no different from any of us. Or Persepolis by Marjane Satrapi, or The Slow Road to Tehran, where Rebecca Lowe cycled from London to Tehran and found not evil but warmth.