State of The Transition, September 2016: “Anyone who does not understand what is going on is not in the right place.”

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September began with the USA and China symbolically ratifying the Paris Agreement in time for the G20 Summit, and ended with French Environment Minister Ségolène Royal tweeting “victoire!” as she and her peers agreed that the EU can ratify collectively without waiting for individual member governments. At the time of writing, the treaty seems to be within days of coming into force. The doubters have been proved wrong.

Many businesses need no further persuasion of the writing on the wall. Six hundred multinational companies are now factoring the Paris Agreement into their business plans, according to CDP. Unsurprisingly, utilities and other energy companies lead, but adopters span many sectors. Sign-ups to the corporate 100% renewable power campaign this month include Apple.

With global temperatures rising fast, leading climate campaigner Pope Francis is among the many voices rightly calling for more, faster. A year on from his influential climate encyclical, the Pope reinforced his appeal to Christians to act. “It is up to citizens to insist that this (Paris agreement in force) happen, and indeed to advocate for even more ambitious goals.” In the UK, more than 3,500 churches – 2,000 of them Catholic – have listened, and ditched fossil-fuel electricity.

A report from the IEA showed that investment in new renewables in 2015 was, for the first time ever, more than enough to cover rising global electricity demand growth. Price records continued to tumble in the wind and solar industries. A new record was set for the cheapest offshore wind farm: €60 (£51) per MWh, by Vattenfall in Denmark. Another world record low solar price was set with a stunning $24.2 per MWh in Abu Dhabi, by Jinko Solar and Marubeni. In China, all new power demand in 2015 was met with wind and solar. Consumption was up 0.5% (by 27 TWh, in a national total of 5,500 TWh). Wind and solar were up 48 TWh (equivalent to twice Ireland’s entire national demand). In India, auctions for hybrid wind and solar power plants are drawing wind giants into the solar industry. The Indian government is targeting 100 GW of solar, and 60 GW wind of which 10 GW must be hybrid. In the USA, completion of the first offshore wind farm, with many others in planning, is attracting offshore oil-industry engineering companies into the wind industry.

All is not plain sailing, inevitably. The US solar rooftop revolution is stalling as a result of pushback from utilities. China plans to rein in green-energy investment after its record boom. Investor sentiment about solar is at an all time low, according to Deutsche Bank, in the face of political risk, low profitability and mounting company debt. But still global investment in renewables is projected to rise each year in 2016-2018, with growth fuelled by India, Latin America and the Middle East.

Meanwhile, the pace of rollout for electric vehicles and autonomous technology has not slackened. Uber became the first company to launch a self-driving taxi fleet, in Pittsburgh. By 2018, using robotaxis could cost the same as owning a car (85 cents per mile, on average), and ever more people will opt for this segment of the sharing economy, an RMI report in September argued. Conclusion: the world is near peak car ownership.

Volkswagen, a company now intent on embracing the electric robotaxi business model, unveiled its first long-distance electric car at the Paris Motor Show. It will travel up to 600km (373 miles) on a single charge, will be on sale by 2020, and self driving by 2025.

That is if the company can stay alive long enough to make the transition. September saw the first criminal charge in the dieselgate scandal: veteran VW engineer James Liang pleaded guilty to fraud. He admits helping develop the “defeat software” used to cheat in emissions tests, and playing a major role in the subsequent cover up. He is now co-operating with the authorities as they investigate who knew what, when, at higher levels in the executive. Papers released as evidence reveal panic among VW engineers as fraud investigators closed in on them. There will be many lessons about corporate malfeasance, and the cultures that sometimes allow it to run riot, once the full case book is closed on the VW saga.

Meanwhile, criminal charges, prison sentences and fines are just part of the whirlwind being reaped. The world’s largest asset manager BlackRock joined an 80-investor €2bn lawsuit against VW in September.

Whatever the outcome in the courtroom and the markets, diesel may be on the way out. Renault said in September that it sees diesel cars being “forced out of the market” as a result of the post-VW emissions-control costs that are now probable.

Then there is air pollution. That vice seems to be tightening on fossil fuels by the month too. In September, a medical research team announced the discovery of “abundant quantities” of the toxic particle reactive magnetite in human brains. The researchers fear increased risk of Alzheimer’s, among other potentially deadly health impacts.

As they watch their competitors advance, the oil and gas industry continues to experience a catalogue of setbacks that are often unrelated to climate policy or insurgency disruption. Investment in fossil fuels is taking a nosedive, the IEA reported. As Executive Director Fatih Birol, put it: “Anyone who does not understand what is going on – governments, companies, markets – is not in the right place.”

Goldman Sachs rubbed salt in that wound. Big Oil was never that big a money maker, it pronounced. A telling chart shows Cash Returned on Capital Invested for ExxonMobil, BP, and Shell varying with oil price over time. It began to fall steeply in 2009, when oil prices were high, well before the current phase of low oil prices began in 2014.

As banks call in loans, North American oil & gas bankruptcies rose beyond 100 in September, on total debts of $67bn. Moody’s reported that these latest bankruptcies have hit lenders harder than previous downturns. They analysed 15 defaults and found average debt recovery of just 21%. The US oil downturn is likely to end up worse than the telecoms crash of the early 2000s, they conclude.

A Bloomberg account of mothballed drillships includes a striking picture of a fleet at anchor off Trinidad and Tobago, each unemployed collossus having cost around $500 million to build. Drilling companies are saving many millions by shutting their drill ships down completely (so-called cold stacking), rather than leaving them with their engines always on, a safer but more expensive approach to mothballing. Bloomberg wonders whether they can ever be successfully turned on again: describing the cold stacking tactic as “a massive gamble.”

And if the oil industry is doing much less drilling, what happens to global oil supply? HSBC joined the ranks of those worrying about this in September, with an analysis that concludes the oil market faces a supply crunch within a year. They point out that demand still grows 1 mbd / yr and no scenario sees a peak before 2040. Decline rates in crude oil fields are in the range 5 – 7%, meaning 3.5 to 4 mbd of lost production capacity per year. By 2040, this means the world could need to replace over 4 times the current crude oil output of Saudi Arabia (>40 mbd), just to keep output flat. “We think risks of supply restraint will resurface long before risks of global demand peaking”, HSBC’s analysts conclude.

Meanwhile, fracking in the UK doesn’t look set to add any oil or gas to supply anytime soon. As a result of delays due to a legal challenge to a county council decision to grant consent, there will be no UK fracking until well into 2017. Who knows how many American shale drillers will have gone bankrupt by then. Maybe enough to register on Her Majesty’s Government?

The stranded assets debate rolls on, with Carbon Tracker and others arguing that risk is high, and the most miners and oil and gas majors, plus their support base, insisting it is low to non-existent. Carbon Tracker’s latest report challenges common power technology assumptions. It finds that the incumbency tends to plan for business-as-usual load factors and lifetimes for new coal and gas plants, whereas load factors are likely to be lower for fossil plants in the post-Paris world, and lifetimes shorter. Since this flawed accounting, once corrected, has the effect of making renewables more competitive, quicker, the power industry is brewing a potent recipe for stranded assets.

Mark Carney, Governor of The Bank of England, is well known for his concerns about stranded-asset risk in the energy sector. He gave a speech in Berlin outlining his latest thinking, backing green finance as a route both to emissions cuts and financial stability in the shape of sustainable growth. Big global investment firms hold over $100 trillion in assets, he pointed out, yet green bonds sold last year amounted to $42 billion. More must be done, quicker.

At least one oil giant is looking to jump ahead of being pushed – whether by governments, or regulators, or investors, or all. Suncor Energy, the biggest producer in the tar sands, is currently seeking permission from the Canadian government to deliberately strand some of its oil-sands assets.

Other long-running dramas in the great energy transition took new turns in September. In mid September New York state’s Attorney General widened his probe into ExxonMobil to include the way it reports reserves. ExxonMobil responded that it is in accord with SEC standards, and that nothing is amiss. The SEC didn’t seem to agree. Six days later it began a probe of its own into how ExxonMobil reports both reserves and climate risks.

Energy is altogether a risky business these days, it seems.

Nowhere more so than nuclear. A BBC investigation this month found that the huge British nuclear facility at Sellafield is riddled with safety flaws. A former senior manager told the Panorama programme of a catalogue of neglect including degraded infrastructure, improper storage of highly radioactive materials & chronic under staffing. The whistleblower was most worried about the risk of a fire that “could generate a plume of radiological waste that will go across western Europe.”

The potentially existential threat to the French nuclear industry posed by high carbon in the steel it uses for pressure vessels continues meanwhile. The Japan Times reported that Japanese steel in French nuclear facilities had been found to have high carbon levels. The Japan Nuclear Regulatory Authority is investigating Japanese reactors, and is due to report in October.

The British couldn’t wait for that, or any of ongoing investigations into the safety of the technology that EDF plans to use for the Hinkley Point C nuclear power plant. On 15 September, after 6 weeks of indecision, UK PM May gave what has been called the biggest white elephant project in history the go ahead .

Risky indeed.

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Appropriate civilization includes environmental balance, sustainable capitalism, empathic societies, racial and religious harmony, poverty alleviation at home and abroad, common security, and use of tech for social good.

New despotism includes environmental sabotage, reckless capitalism, isolationist nationalism, incitement to racial and religious hatred, retreat from aid, war mongering, and the use of tech for social harm.

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