Ceres applauds today’s announcement from President Biden that he will work with other world leaders to craft a Global Methane Pledge to reduce methane emissions worldwide by 30% from 2020 levels by 2030 across all sectors through stronger emissions standards. Major investors and companies, as well as environmental and sustainability advocates around the world have been calling for strong government action on the potent greenhouse gas for years.
“Institutional investors and major companies — including oil and gas giants — have long supported imminent federal regulation of methane emissions,” said Billy Gridley, director of investor public policy at the nonprofit sustainability Ceres. “This pledge signals a new level of multilateral government leadership and commitment from the United States, the European Union, and other signatories to address a highly potent greenhouse gas that is responsible for increasing global warming to harmful levels. This new collaboration is a significant and critical step in the right direction if we are truly going to get the climate crisis under control and limit global warming to no more than 1.5 degrees in the next decade.”
The pledge signals a new, strong multilateral stance ahead of the COP26 meeting this November. In remarks at today’s Major Economies Forum on Energy and Climate, President Biden said the United States is working on the pledge with the European Union, and encouraged other countries to sign on.
"We welcome this pledge from the White House to address major sources of methane emissions,” said Brian Rice, Portfolio Manager, California State Teachers’ Retirement System. “Investors need clear policies to accurately assess and price climate related risks and opportunities to assets in our portfolios.”
It comes on the heels of a ‘code red’ warning from world scientists who warned without immediate, large-scale emissions reductions, previous targets limiting temperature rise to 1.5 degrees Celsius will be out of reach. They reported that atmospheric concentrations of methane are higher now than any time in at least 800,000 years, and that methane is already responsible for as much as 0.5 degrees Celsius of warming since preindustrial times.
Methane is more than 80 times as potent as carbon dioxide as a greenhouse gas in the first 20 years after it is emitted. However, methane begins to dissipate in the atmosphere after about ten years, while carbon dioxide persists for centuries. As a result, methane emissions reductions present an urgent and unique opportunity to limit near-term warming.
Methane-related emissions exacerbate respiratory illness and contribute to ground-level ozone and smog, increasing the risk of heart disease. These impacts hit industry workers and those living near well pads and fall disproportionately on disadvantaged populations and communities of color.
Last April, investors representing $5.35 trillion in assets under management called on the Biden administration to set comprehensive regulations with strict enforcement aimed at urgently curbing methane emissions in a statement organized by Ceres and ICCR ahead of the upcoming rule-making on methane by the U.S. Environmental Protection Agency, expected this fall.
Many major oil and gas companies including Jonah, Pioneer, BP and Shell have also already spoken out in favor of strong regulation.
“Reducing methane emissions is the single most important tool we have to prevent warming in the near-term,” said Andrew Logan, senior director of oil and gas at Ceres. “We know that even today, many emissions are entirely avoidable. Publicly available oil and gas company data show wildly different emissions intensities between similarly-sized operations. That has to stop if we hope to hit critical climate deadlines.”
In June, Ceres released a first-of-its-kind report benchmarking the methane emissions of oil and gas companies. It showed enormous gaps between the emissions intensity of production between companies — the bottom 25% of emitters generate 22 times the emissions per unit of production as the top 25% — demonstrating that a considerable opportunity exists to reduce methane emissions in the oil and gas sector. Last month, Ceres announced the Ambition 2030 initiative, aimed at moving six of the highest-emitting sectors toward zero emissions. Oil and gas and food, highlighted in the IPCC report as major contributors to global methane emissions, are two of the initiative’s focus sectors.
About Ceres
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.