Imposing a carbon tax on oil exports makes no sense

Major consumers of coal simply turn a blind eye to compliance with the carbon emission targets agreed upon in the Paris Agreement

  
French oil giant Total Refinery is seen during sunset in Donges, France, November 30, 2020. Image used for illustrative purpose.

French oil giant Total Refinery is seen during sunset in Donges, France, November 30, 2020. Image used for illustrative purpose.

REUTERS/Stephane Mahe

Not only is Saudi Arabia bringing a new perspective to the 26th UN Climate Change Conference, also known as COP26, but it is leading by example as usual by hosting inaugural events in Riyadh a few days ahead of the conference.

Riyadh will host the inaugural editions of the Saudi Green Initiative Forum and the Middle East Green Initiative Summit on Oct. 23-25. The events are a testament to the Kingdom’s pioneering role in protecting the climate and supporting international efforts in confronting the challenges related to the environment. They are also a proactive step in accelerating climate action a few days ahead of COP26, which will take place this November in Glasgow.

The US, as one of the top three largest oil producers, strongly rejected the carbon tax during the Kyoto Summit in 1997. The US also became the first nation to formally withdraw from the Paris Agreement in 2017. President Joe Biden rejoined once he assumed the office, which made the US the only country of the nearly 200 signatories to withdraw then rejoin the pact.

But will the US sacrifice its interests as a top oil producer and the largest oil consumer for the sake of the Paris Agreement? The outcome of COP26 will be crucial for the future of oil-producing countries if the US takes decisions in support of the European approach to imposing a carbon tax.

The Saudi Green Initiative Forum will bring together elite policymakers and scholars from around the world to start a new era of regional and international cooperation in the fight against climate change and its related crises through a more realistic and proactive approach.

Interestingly, the Paris Agreement does not scrutinize all fossil fuel carbon emissions equally, though coal is clearly responsible for the greatest proportion. Coal is the elephant in the room when we consider carbon emissions. Whenever the phenomenon of global warming is mentioned, however, oil is demonized and often suggested to be the main cause. Major consumers of coal simply turn a blind eye to compliance with the carbon emission targets agreed upon in the Paris Agreement. Therefore, allowing major coal-consuming nations to impose a carbon tax on oil exports makes no sense.

The International Energy Agency reported that global coal consumption was 65 percent higher in 2020 than in 2000. In other words, global demand for coal is increasing to meet the growing demand for electricity despite international efforts to decrease dependence on coal in the production of electricity.

This rise in coal consumption runs counter to the Paris Agreement and everything it aspires to achieve. Coal remains the largest single source of fuel for generating electricity.

China, the US and India are the greatest emitters of carbon dioxide. Their emissions continue to increase in the atmosphere. China pledged to reduce carbon emissions by 20 percent and the US by 18 percent. These numbers are in line with the Paris Agreement’s aim of limiting global warming to no more than 2 degrees Celsius by 2100.

One of the biggest contradictions of the Paris Agreement and its advocates is the failure of the world’s largest consumers of coal — China, the US and India, who are also among the five largest coal producers — to adhere to the targets set for percentages of carbon emissions specified in the agreement. Thus, it may be time to refocus our attention and think seriously about dethroning old king coal instead of demonizing oil.

Faisal Faeq is an energy adviser and columnist. He formerly worked with Saudi Aramco and OPEC Secretariat. Twitter: @FaisalFaeq.

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