The scale of the UK Labour party’s flagship £28bn “green prosperity plan” has been cut, as shadow ministers push back timings and reduce its expected scope by as much as £8bn, reports the Financial Times. Labour has “steadily trimmed the policy” over concerns that the plan would add tens of billions of pounds of debt to the UK’s already strained public finances, it continues. The plan involves borrowing to invest in low-carbon energy projects, the decarbonisation of heavy industry and a mass home insulation programme, and has been loosely modelled on US president Joe Biden’s $369bn Inflation Reduction Act, it states. Senior party figures tell the FT that the £28bn Labour spending commitment may not be met until the end of the next parliament, if Labour win power. 

The cuts follow leader Kier Starmer’s speech at the Labour party conference this week, where he attempted to counter Rishi Sunak’s “doom and gloom about the supposed cost of climate action” with a more optimistic message, Guardian analysis by Fiona Harvey suggests. “Climate underpins the policies of nearly all of those who would hold the great offices of state and is a clear thread running through Labour’s electoral strategy”, the article notes. This follow’s “Sunak’s vandalism of environmental policies”, which led to fears the party would engage in a race to the bottom, the article notes. ITV News’ Anuska Asthana questions Sunak’s rollback of climate policies (covered by Carbon Brief at the time), asking, as the “PM is not a magician – how can he weaken net-zero policies but still hit his targets?” The article highlights analysis carried out by Carbon Brief senior editor Dr Simon Evans, that shows that the policies will shift the trajectory of our carbon reduction, lifting us clearly above the levels legally required in the 2030s.

Hitting global net-zero goals and reducing poverty are being hindered by the severe debt burden on poor countries, the president of the World Bank has warned, reports the Guardian. This comes amid growing concern that high interest rates could cause dozens of countries to default, it adds. Speaking at a press conference in Marrakech, the new head of the World Bank Ajay Banga has urged faster progress in providing debt relief, but said there is no “magic wand” that could be waved to make the problem go away, the article continues. The bank’s chief economist Indermit Gill added that the last time the Federal Reserve raised their interest rates as aggressively as it has recently was more than 40 years ago, and the result was that 24 countries went bankrupt, the Guardian notes. The World Bank is trying to persuade governments to take money away from subsidies for fossil fuels and invest in causes like climate change, reports Climate Home News. Currently, governments globally spend more than half a trillion dollars a year on making the use of fossil fuels cheaper and the bank wants some of that diverted to tackling climate change, it adds. This pivot in focus follows calls from the wealthy governments that fund the World Bank to highlight climate change alongside its traditional goal of eradicating poverty in the developing world. 

Elsewhere, the World Bank, together with Japan and other partners has launched a new project to diversify renewable energy supply chains, reports Nikkei Asia. Concern is growing over the global reliance on China for critical materials for electric vehicles, solar panels and more, it notes. The partnership for Resilient and Inclusive Supply-chain Enhancement (RISE) is designed to financially and technologically assist emerging countries, which currently primarily produce the raw materials used in these supply chains, to build up processing capacity and allow them to assemble the final projects, the article continues. The goal is to curb security risks by ensuring a stable global supply of key materials, it adds.

US oil-and-gas major ExxonMobil has agreed a $60bn takeover of Pioneer Natural resources, more than doubling its position in America’s fracking heartland, reports the Times. The all-share merger is Exxon’s biggest deal since it took over Mobil a quarter of a century ago, it adds. The acquisition “places a vast bet on a future for fossil fuel production” in the US, notes the Guardian, increasing Exxon’s dominance in the Permian Basin shale field. The company’s shares have almost doubled in the past two years as oil and gas prices rose, taking over Pioneer now capitalises on that market rally, it continues. The Financial Times quotes ExxonMobil CEO Darren Woods, who said: “The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis.” The FT notes that Exxon’s bet on Pioneer, despite forecasts that climate change will eventually force the world to switch to renewable energy sources, stands in contrast with other majors, such as BP, which is targeting cuts in oil and gas production of 25% by 2030. Exxon executives have said that as well as producing more fossil fuels the company is building a new business focused on carbon capture from industrial sites, reports the New York Times. The acquisition of Pioneer ensures Exxon far outpaces Chevron, its biggest rival in the Permian Basin, the article continues. The merger will see Pioneer’s 850,000 acres and Exxon’s 570,000 acres in the region combined, giving it one of the largest undeveloped oil and gas inventories in the world, it adds. The Washington Post states the merger is in direct conflict with US and global climate policies, and points to the International Energy Agency’s report last month that demand for oil, gas and coal will peak by 2030, before going into a steady decline. This led executive director Fatih Birol to warn oil company executives that doubling down on fossil infrastructure is misguided, it adds. US senator Elizabeth Warren has expressed concern about the acquisition, saying it could raise costs and should be probed by regulators, reports Reuters. A Lex comment piece in the FT suggests that “investors should approve”, as the acquisition will boost Exxon’s capabilities of removing resources from the ground cheaply rather than any “exploration revolution”. 

Elsewhere, former governor of the Bank of England Mark Carney has said it is “not right” to expect countries with oil and gas industries to “shut down overnight”, reports the Daily Telegraph. Speaking at an event hosted by the International Monetary Fund, Carney said: “In economies that have conventional energy – so oil and gas production – you can’t shut those down overnight. That’s not right. That’s not a just transition. You need to build up the alternatives. You need to work with the communities, train people, undergo the transition and all elements of that need to be financed. And they are equally worthy,” the article notes.

China saved nearly $10bn this year by making “record” oil purchases from countries facing western sanctions, according to calculations made by Reuters based on data provided by traders and shiptrackers. China imported a “record 2.8m barrels per day of crude by sea from Iran, Russia and Venezuela” between January and September 2023, it adds. France24 reports that China will welcome foreign leaders next week to “celebrate a decade of its belt and road infrastructure project”, with Russian president Vladimir Putin “expected to attend”. 

Energy news outlet CN Energy News reports that Chinese leader Xi Jinping visited southeast China’s Jiangxi province, where he inspected the restoration of the banks of the Yangtze river and the Jiujiang brand of Chinese oil and gas enterprise Sinopec to learn about the “green transformation of the petrochemical enterprise”. Chinese energy site IN-EN.cn publishes an article by the director of the renewable energy department at the National Energy Administration, who writes that China will continue to develop hydro-wind-solar power bases and pumped storage hydroelectricity, as well as “accelerate the green and low-carbon transformation of rural energy according to local conditions”. Meanwhile, China Dialogue has published an analysis by researcher Chris Qihan Zou, who argues that “hydrogen has the potential to be a clean alternative to fossil fuels in various sectors”, as long as the “right mix” of policies and incentives is created.

Politico reports that the day before EU energy commissioner Kadri Simson left to attend the EU-China energy dialogue in Beijing, she “refused to rule out” an investigation into China’s subsidisation of its wind turbine manufacturers. Bloomberg quotes a BloombergNEF analyst saying that “even if an anti-subsidy investigation leads to a tariff on Chinese turbines, it will have very limited impact on the dynamics of the EU wind market”. Chinese business outlet Jiemian agrees that an anti-subsidy investigation against China’s wind power industry is unlikely to have an immediate impact but may “hinder Europe’s own energy transition and climate goals”. Finally, Bloomberg quotes Chey Tae-won, chairman of key Ford Motor supplier SK Group, saying that US-China tensions will “keep electric-vehicle battery prices higher for longer”.

Former UK prime minister Gordon Brown argues in an article for Project Syndicate that high-income countries must provide the necessary funds to allow developing-countries to build a global consensus around climate action and sustainable development. A “new generation of leaders from the global south are making their voices heard”, he writes, pointing to Barbadian prime minister Mia Amor Mottley, Kenyan president William Ruto,  Colombian president Gustavo Petro, among others. Brown highlights different potential economic steps, including taxes in the highest income countries, that could secure the necessary funds to create a climate “Marshall Plan”. Brown concludes: “While today’s world and the crises it faces are very different, the scale of the response must be equally ambitious. Countries in the global south are charting a way forward. Now, their rich counterparts in the global north must step up and provide the necessary funding. The money is there, but we need the political imagination and will to use it, before the next crisis arrives.”

The global race for climate leadership – and the economic opportunities it presents – is the topic of several comment pieces today in right-leaning outlets, including one by the climate-sceptic “emeritus professor of engineering” at the University of Cambridge Michael Kelly (and trustee of UK-based climate-speptic lobby group GWPF) who argues the net-zero plan will require a “command economy” in an article in the Daily Telegraph. Right-wing economic writer Krzysztof Tyszka-Drozdowski also claims in the Daily Telegraph that China has “already won the green energy war”.

Labour’s proposed energy policy is “particularly ill-advised and destined to fail” argues columnist Iain Martin in the Times. Shadow energy secretary Ed Miliband’s “proposal for GB Energy, a state-run clean energy company, leaves experts in the sector troubled by the prospect of Labour ministers trying to rewire the national grid in a way that sounds, at best, confused”, he writes. However, such criticism is one of few “scraps” for the Conservatives, as Labour leader Keir Starmer is “now doing such a clever job of making his party’s plans sound calm and unobjectionable”, Martin continues. This, he says, is why the Tory party has been “reduced to exaggerating – or making up – Labour policies, such as a tax on meat” (an idea that is not part of Labour policy, as explained by Carbon Brief). 

In the Financial Times, investment columnist Natalie Thomas argues that Starmer’s move to reform planning regulations to enable electricity grid expansion is a “clever gamble” that could win over business, although not without its challenges. Also in the Financial Times, deputy news editor Alice Ross cautions that prime minister Sunak’s green u-turn has dismayed sustainable investors, with many warning they will look outside the UK for investments. An article in the South China Morning Post by academics Bhavya Gupta and Ramkishen S Rajan explores how to tackle the public backlash against the “costs of a green transition”. 

An editorial in the Wall Street Journal argues that ExxonMobil’s $59.5bn acquisition of Pioneer Natural Resources is a “bet on US shale fracking and hedge against the left’s anti-fossil fuels policies”. The article discusses the wider investment environment and argues that a hostile regulatory environment is making it more difficult to explore and develop new resources. Shale yields “quick returns” on investment unlike other oil and gas developments, it notes, meaning “the Pioneer tie-up makes Exxon less vulnerable to government policies aimed at reducing long-term supply and demand”. The current Biden administration is continuing to “slow-walk new drilling permits and leases” making growth through acquisition more appealing. “How ironic that Mr Biden’s climate policies create an incentive for big players to get bigger,” notes the editorial. Exxon CEO Darren Woods has noted that the world will need fossil fuels for many decades, the article concludes: “It’s better for US workers and the economy if production happens at home rather than overseas.”

Changes in temperature and oxygen could drive a centuries-long irreversible reduction in the habitable volume of the upper 1,000 m of the world ocean, according to new research. The model study tracks a metabolic index in 72 species under different scenarios of atmospheric CO2 concentration, including “overshoot” scenarios. In contrast to previous research suggesting changes may be reversible, the authors suggest that the combined effect of warming and oxygen loss “will have profound and long-lasting impacts on the viability of marine ecosystems, well after global temperatures have peaked”.