03/17/2015 03:54 pm ET Updated May 16, 2015

Winston Churchill: "He Who Controls Oil"

Five months ago, the stars were looking aligned for this year's climate summit in Paris. The US and China, the world's largest carbon polluters, had just signed a historic action plan to curb their emissions.

After a two decade stand off over should who should make the bulk of cuts, both sides agreed to set the pace in these long suffering UN talks. Observers, who had witnessed the last global effort to save our climate collapse six years earlier, dared to release a cautious sigh of relief: the stage for this December's shindig had finally been set.

And, the stakes couldn't be higher.

Eight months earlier, the United Nations had just released its most harrowing assessment on the state of our climate yet. It warned that the impacts of global warming are happening faster, and are much worse than originally anticipated.

What was once a distant existential threat had been firmly thrust into the present. In the words of the one of the authors of the report: "We are all polar bears now."

A few weeks later, the head of the World Bank Jim Yong Kim warned that battles over food and water will break out over the next five to ten years: the food riots of 2008, a mere harbinger for a century of conflict.

And, to make matters worse, this is only the beginning: world temperatures may rise by up to six degrees Celsius by the turn of the century. Mark Lynas likens a 6C world to Dante's Sixth Circle of Hell.

With the fate of our species hanging in the balance, this year's Paris gathering is beginning to look like humanity's last chance saloon.

In protest, over half a million people across the planet took to the streets last September to call on their world leaders to end their reckless affair with fossil fuels.

A few days later, the original oil dynasty, the Rockefeller's announced plans to move its money out of oil, gas and coal, concluding that if its founders were alive today, they would be looking to the future, and investing in green energy.

A sea change was finally palpable.

But, the winds of change never did run smooth.

As Niccolo Machiavelli wrote 500 years earlier:

"There is nothing more perilous to conduct, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions."

Five months ago, few could have predicted oil's precipitous fall.

About two weeks after the US and China signed their historic deal to rein in carbon emissions, OPEC, the powerful oil cartel lead by Saudi Arabia, roiled the market when it decided to maintain supply at 30 million barrels of oil a day.

The price of black gold took an immediate tumble, falling to a three year low to close near the 70 dollar a barrel mark. It is currently languishing about thirty dollars lower.

As Winston Churchill once said: "He who controls oil will win the next war."

According to Sir David King, the UK's former head scientist and current envoy for climate change, "Opec could have certainly reduced supply to 27 million barrels a day and kept the price double of what is it now. So, the important question is: who are they driving out of business."

The fall in black gold has been a subject of intense speculation.

Some say that it is a US lead campaign to weaken oil exporting nations like Iran and Russia.

Others claim that it is a Saudi strategy to claw back market share both from the US shale, and green energy boom. After all, both were becoming cost competitive with fossil fuels six months earlier: a sustained period of low US interest rates had financed their technological advances.

It would seem that both theories are correct. Speaking last December, Saudi Arabia's all powerful oil tsar Ali al Naimi said:

"It is not in the interest of Opec producers to cut their production, whatever the price is. If I reduce, what happens to my market share? The price will go up and the Russians, the Brazilians, US shale oil producers will take my share."

Although its game plan may hurt profits in the short term, it was a necessary sacrifice in order to secure long term market share.

And, unlike US shale which costs "between $30 and $90 a barrel" to break even, Saudi oil, costs "less than $10 a barrel to produce," writes Anjli Raval in the Financial Times.

With some countries calling for a complete phase out of fossil fuels by 2050, perhaps the Middle Eastern kingdom knows that it's days of selling cheap oil are numbered.

Speaking at the Lima climate talks last December, Saudi Arabia's lead negotiator Khalid Abuleif acknowledged: "We know that climate change policy will affect our future and we are working very hard to raise our resilience. We know we're in a race with time."

In fact, Saudi is already trying to diversify into solar energy.

After all, even the ultra conservative Bank of England has voiced it's concern about the impending carbon bubble.

In order to avoid catastrophic levels of climate change, three quarters of existing fossil fuels will need to stay in the ground. And, as oil and gas companies are among the largest in the world, a sudden plunge in their market value could trigger an economic collapse.

But, with the price of Saudi oil now cheaper than both US shale and green electricity, it may be more difficult to convince the consumer to switch to green energy in the near future.

However, the only way that markets are going to get a clear signal to invest in more innovative forms of clean power, which in turn will become cheaper and cheaper, is for world leaders to strike an ambitious and robust accord by the time they gather in Paris this December.

In the words of actor Leonardo DiCaprio as he addressed heads of state last September: "You can make history, or be vilified by it."

After all, it is hard to imagine future generations forgiving us if we bequeath them a parched planet reminiscent of Dante's six realms of hell.

But, according to Lord Nicholas Stern's latest report, current global emission targets fall too short to limit the warming of our planet to two degrees celsius.

With a steep temperature rise sitting on our global horizon, one is reminded of the words of Martin Luther King: "We are all caught in a inescapable network of mutuality, tied in a single garment of destiny." And, unless governments the world over raise their game, our collective destiny will be most challenging indeed.