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multinationals observatory
Blueprint Offers Fossil Fuel Phaseout Solution: Nationalize Big Oil
"If we are to truly start phasing out fossil fuels," said a report co-author, "we must tackle the economic and political weight of the fossil fuel majors."
Dec 08, 2023
Over a week into the United Nations Climate Change Conference, a pair of groups on Friday unveiled a detailed report to argue that taking control of fossil fuel companies is necessary to accelerate the renewable energy transition—and explaining exactly how to do it.
"The climate crisis is accelerating right before our eyes," reads the blueprint from 350.org and the Multinationals Observatory. "If we wish to minimize the global rise in temperatures, not only do we need to stop exploiting new fossil fuel deposits but we also need to reduce gas and oil production by 5% and coal by 8% every year until 2050."
The report—titled TotalEnergies: This Is What a Total Phaseout Looks Like—explains that "after decades of denial and overt obstruction, big oil and gas multinationals like TotalEnergies are now choosing to adopt a more subtle, and seemingly more constructive, narrative on the climate question. They've claimed to whoever would listen (mostly successfully when it comes to political leaders) that although they were definitely part of the problem, they were also part of the solution, if not the solution itself."
"As the climate crisis rages on, it is urgent that we dare to imagine a world without fossil fuels—and this must start with thinking through how to concretely reclaim control over fossil fuel giants."
Clémence Dubois, 350.org's associate director of global campaigns and coordinator of the report, used the U.N. summit as an example, noting Friday that "a record number of close to 2,500 fossil fuel lobbyists, including CEO of TotalEnergies Patrick Pouyanné, are at COP28 this year to push this version of the story."
Some world leaders have rejected Big Oil's claims—Christiana Figueres, former executive secretary of the U.N. Framework Convention on Climate Change, said this summer that "what the industry is doing with its unprecedented profits... has changed my mind" about companies being part of the solution—but many others continue to buy into it.
Fossil fuel giants have "hugely monopolized the climate action narrative—aiming to neutralize and undermine the arguments—while also managing to secure a large share of the funding to finance the development of the technological and market 'solutions' they're pushing," the report says. "They've also bought up the smallest players in the renewable and energy transition sector and are occupying more space in climate-related policies at a global level, within or around the margins of U.N. conferences. With an oil boss as president of COP28, we are witnessing the culmination of this process."
Abu Dhabi National Oil Company CEO Sultan Ahmed Al Jaber has long been a controversial pick for COP28 president but has come under fire recently for allegedly using his role to pursue oil and gas deals and falsely declaring on Sunday that "there is no science out there, or no scenario out there, that says that the phaseout of fossil fuel is what's going to achieve 1.5°C," a reference to the Paris agreement's more ambitious 2100 target.
Dubois asserted Friday that "as the climate crisis rages on, it is urgent that we dare to imagine a world without fossil fuels—and this must start with thinking through how to concretely reclaim control over fossil fuel giants that have become too harmful, and what that looks like."
Using TotalEnergies as a case study, the report stresses that the process "must be based on the following three foundations—a nonnegotiable, rapid exit from fossil fuels; the participation of TotalEnergies' employees to ensure a fair and inclusive transition (so no one is left behind); and finally, democratic conduct and supervision in conjunction with the scientific community, all affected stakeholders, and all citizens."
"Going down the route of regulation was often disappointing and ineffective," but "we could still consider pushing further down this road as a way of diverting the current trajectory of TotalEnergies, its partners, and those who fund its activities," the document notes. Doing so would involve serious climate, financial, and tax regulations; changes to lobbying policies and competition law; and price controls.
"Another complementary route to change would be to transform the company's strategic direction and governance from the inside, so that they reflect a wider set of interests and objectives that go beyond profitability and return on investment for shareholders, starting of course with a key goal of rectifying the climate crisis. This is what we could call TotalEnergies' democratization roadmap," the report details.
The publication then offers a third route—nationalization—stating that "there's no doubt that taking public control seems like the first crucial step in releasing TotalEnergies from the stranglehold of the financial markets, reducing its capacity for harm, and imposing a new trajectory to exit from fossil fuels in a transparent and democratic way."
Nationalizing the French multinational would require action from the nation's Parliament. The report points out that "this law could go beyond TotalEnergies to cover other French companies that own or exploit fossil fuel deposits and could include supplementary provisions to ban fossil fuel assets from being held as private property and forbid companies operating under French law from being involved in developing or exploiting new fossil fuel sources."
The document also acknowledges that national control "does not in itself guarantee democratic supervision and decisions that will lead the company in the 'right direction,'" especially "if the state itself is not democratic or does not have structures in place to democratically control and guide these public companies."
"Acquiring TotalEnergies is therefore only the first step," the document emphasizes, "and must be followed by at least two further steps—democratizing governance and operational management and, at least initially, transforming the company into a public, industrial, commercial institution with a clear mission to exit from fossil fuels."
"We cannot wait for fossil fuel companies to be willing to change by themselves."
The report also envisions a TotalEnergies takeover as part of a broader movement that could start at the European level and "then be gradually rolled out to private multinationals headquartered in North America and elsewhere to publicly owned oil companies, including some (like in Latin America) that have been public organizations with social objectives at different times in their history."
Report co-author and Multinationals Observatory co-founder Olivier Petitjean said Friday that "with this report, we want to open a debate on an idea which may seem radical but which is also, in a way, a truism: If we are to truly start phasing out fossil fuels, we must tackle the economic and political weight of the fossil fuel majors."
"We cannot wait for fossil fuel companies to be willing to change by themselves," Petitjean argued. "Global heating and its impacts are accelerating, just as war and pandemics have done, and this could be a trigger for change, with previously unthinkable scenarios quickly becoming credible or even unavoidable. We want to challenge political leaders to imagine them, and to implement them."
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