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A host of oil supermajors announced on Friday that they would allocate US$1 billion for fighting climate change over the next ten years. The effort, called the Oil and Gas Climate Initiative, involves BP, Shell, Aramco, Total, Eni, Statoil, Repsol, CNPC, Pemex, and Reliance Industries.
Among the priorities of the initiative are cutting methane emissions from oil and gas pipeline leaks, and accelerating the development of carbon capture, use and storage technology.
The money that the ten companies pledged will be collected in a fund, OGCI Climate Investments, which will partner with businesses from the transport and other energy-intensive industries in a bid to improve energy efficiency in these sectors.
Reuters notes that the OGCI announcement coincides with the official entry into force of the Paris Agreement on climate change, which seeks to mitigate the adverse effects of the changing climate.
The agreement was signed this spring by 171 countries, and its central goal is to keep global temperature increases below 1.5-2 degrees Celsius. It required ratification by at least 55 signatories to come into force.
According to the latest report from the international Panel on Climate Change, in order for the 2-degree target to be achieved, the signatories of the agreement would have to cut emissions by 40-70 percent by 2050. For the more ambitious target of reducing temperature rises to 1.5 degrees, emissions would have to be cut by 70 or even 95 percent.
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Of course, a lot of these emissions come from the use of fossil fuels, which has led to the rise of a lot of hostility towards energy companies. It was only a matter of time before supermajors began taking notice of these developments and joined the effort in some way.
The amount pledged, however, pales by comparison to the funds that the governments of developed countries have vouched to contribute to the common effort until 2025: US$125 billion.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.