The Report On Climate Change Dictates

5048 Words21 Pages
The Challenge. (Intro.) The IPCC 5th report on climate change dictates we may have hit the no-return mark before action of climate change becomes too late, with a high degree of agreement, it is clear that we live in a carbon-constrained world with a carbon budget beyond which the irreversible catastrophic impacts of global warming may not be avoidable. To have a 50% chance of staying below 20C of global warming, 62% of fossil fuels proven reserves, and 88% of coal reserves must stay in the ground. Huge new fossil fuel developments, like the Galilee Basin in Australia, the tar sands in Canada and new resources in the Arctic, cannot be developed. Oil majors are caught in a dilemma; the challenge of choosing between being proactive towards the pressing climate change issue in a carbon-constrained world by shifting their interest from the pursue of further exploration and production of hydrocarbons, and between maintaining current business models that prioritizes immediate profit and short-termism in capitalizing on fossil fuel market while it remains feasible from an economic standpoint and from a return on energy investment perspective. (RoEI). Companies that promote short-termism in reaping maximum profit from the sustained growth in oil production may be caught off guard and suffer from potential climate change mitigation scenarios that could have drastic implications on the industry, such as the sudden introduction of stringent policies to mitigate the rapidly
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