This is the final part of a three-part series exploring the Low Carbon Development Strategy (LCDS), COP26, and Guyana’s role in the global fight against climate change.
IN the first two parts of this series, Understanding Energy discussed how Guyana’s Low Carbon Development Strategy (LCDS) outlines goals similar to those discussed by leaders at the UN Climate Change Conference to reduce emissions, while continuing to meet rising global demand for energy. According to the COP26, meeting these goals are vital if we hope to achieve a less than 1.5-degree Celsius rise. The next questions are: what actions are needed to ensure that the world will meet these new emissions reduction and other climate goals, and what is the role for oil and gas?
Over the last few weeks of discussions, green technologies in the energy space have continued to be a central element of plans to reduce global emissions, while meeting rising energy demand. Plans to reduce industrial and construction emissions, reduce investment in new coal plants and increase the rate of deployment rate for clean technologies took centre stage at this year’s COP.
Renewable energies, like solar and wind, are methods for generating energy while reducing emissions and supporting the transition away from oil and gas. Nuclear power is also being reconsidered in many European and Asian countries after years of slow decline due to its ability to provide large amounts of clean energy continuously and help make up for the intermittency of renewable sources.
But the transition to renewable energies can be challenging for developing countries, where energy demand is increasing rapidly, and electrical grids may not be prepared to handle the needs of renewables. Recently, there have been severe price spikes for energy in Britain and a return to coal production in other countries due to unexpected issues as reliance on renewable energy grows.
A staged approach like Guyana’s, with a near term transition to cleaner but not emission-free sources like natural gas and a long-term eye towards renewables, is often the most viable path forward. This allows countries the same opportunities that the developed world had, while also keeping environmental goals top of mind. Without the opportunity to develop resources, these countries could miss out the revenue that will be essential to deal with the impacts of climate change and pursue a transition to renewable energy. Furthermore, by following a staged approach, countries can avoid vulnerabilities presented by an all-renewable strategy, which can be impacted by weather patterns like droughts and rain.
On top of renewable energies, other technologies to capture and replace emissions have been developed and implemented around the world. Carbon capture and sequestration (CCS) is one innovative technology that is used to reduce emissions of carbon dioxide, the primary gas driving climate change. CCS is used to capture and store carbon dioxide produced by fossil fuels so that it is not released into the atmosphere.
In the case of the oil and gas industry, production emissions can be captured and stored deep underground or turned into durable products like cement that trap carbon dioxide without impacting the climate. Other CCS approaches can remove carbon dioxide directly from the open air or capture emissions directly from large polluters like power plants.
Scientists widely agree that CCS will eventually play a vital role in reversing some of the impacts of climate change, especially if the use of oil and coal remains high. The United Nations has called for increased investment into CCS alongside other medium-term technologies like green hydrogen to combat emissions.
Analysts like Arthur Deakin, the co-director of the energy practice at Americas Market Intelligence, have concluded that CCS may be a good option in the future for Guyana. Companies, including ExxonMobil are already working to deploy the technology in some countries. But countries like Guyana will need significant private investment to actually utilise CCS. These technologies are proven to work but remain expensive and are still in their early stages of implementation. They also require a careful balancing act—if the costs are too high, they can render oil from that country uncompetitive on the global market.
Guyana’s government is already thinking about its long-term strategy and supports goals to hit net-zero by 2050. The government is a proponent of global carbon pricing through either a global carbon tax system or a global carbon market. Furthermore, the Low Carbon Development Strategy (LCDS) outlines the importance of forest climate services, biodiversity, water management, and the Ocean Economy as the country continues to responsibly develop its resources.
Forest services may play a significant role in Guyana, which has sold carbon offsets to countries like Norway before. But, while this will be a piece of the puzzle, Vice President Bharrat Jagdeo recently explained that oil will yield significantly more revenues and Guyana is reluctant to stake its future on offset markets established by the industrialised world.
As COP26 ended, the consensus continues to be focused on building a multi-pronged technological approach to reducing global emissions to reach climate goals. New technologies, including CCS, will be key to meeting those goals, but continued development of oil and gas will also be necessary for many years to come to help meet demand and help developing countries sustainably create their own wealth at home.