It is ridiculous to think that we can immediately stop the production of fossil fuels: CEO

Fossil fuels have taken root in the global energy balance, and companies continue to discover and develop oil and gas fields in various locations around the world.

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LONDON – The CEO of Standard Chartered finds it “ridiculous and naive” to think that fossil fuel production could be stopped immediately without any repercussions, saying that while it could be beneficial to the climate, it would have other negative consequences.

In comments made during an interview with CNBC’s Jeff Kathmar at the City Week forum in London on Monday, Bill Winters acknowledged that most people subscribe to what he called a “fair transition”.

“These two really important words… just mean fair, it also means it’s possible,” he said. “And the transition means the transition – it means it takes some time.”

“The idea that we can turn off the taps and stop fossil fuels tomorrow is obviously ridiculous and naive,” Winters said. “Well, first, it’s not going to happen, and second, it’s going to be very destructive.”

Winters said it would be good for climate change, but “bad for wars, revolutions and human life because you will have … chaos.” He argued that the “final redemption option” needed to be removed from the table.

Winters ’comments appear at a time when the use of the term“ fair transition ”is becoming more common in discussions related to climate change, energy, environment and sustainability.

The topic is complex, and the term itself is defined differently. The Greenpeace environmental group, for example, described it as “a transition to a more sustainable, fair economy for all, including people working in polluting areas.”

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A major bank with a presence in 59 markets, Standard Chartered is listed in London and Hong Kong. He outlined plans to achieve zero carbon emissions from financial activities by the middle of the century.

According to Standard Chartered, in 2021 its total on-balance sheet and off-balance sheet risks in the oil and gas industry were just over $ 20.65 billion.

From A to B

Achieving any significant changes in the energy balance of the planet is a huge challenge.

Fossil fuels play a crucial role in developed and emerging economies, and companies continue to discover and develop oil and gas fields in various locations around the world.

Any transition to an energy system and an economy focused on renewable energy and low-carbon technologies will require huge amounts of money.

Along with the huge necessary costs, such a shift will also radically change the way of life and work of billions of people.

For his part, Winters said “we need to move on” but questioned how this could be better achieved.

“How do you balance that,” he said. “What … is the best way to get from point A to point B, ensuring that you take with you as many emitters of the world as possible?”

“It didn’t do any good to set up a system for people to just check,” he said, continuing to explain how he sees the reality of the situation on the ground.

“In many markets, in emerging markets that serve Standard Chartered, if we tell them that … one, we’re going to catch you and [two] you will have to pay well for it, they will say well … we will not be part of this system. “

It yielded nothing, Winters said. “Rather, we … need to prove them in the most constructive way – oil companies are part of that.”

“Some of the biggest money from both the technological changes we’re talking about and the protection of existing carbon sinks are existing fossil fuel producers,” he said.

“Why don’t we let them redistribute part of their share capital – and, in fact, most of their share capital – into things that can make a big difference? I, for one, would support it whenever possible.”

Great discussion

Winters ’remarks raise eyebrows and are of concern to climate activists and campaign groups seeking a sharp end to the fossil fuel era.

They also come at a time when high-level bodies such as the International Energy Agency are considering the role fossil fuels should play in the future.

In 2021, the Paris-based organization said that “there should be no investment in new fossil fuel supply projects and no further final investment solutions for new coal-fired power plants.”

Along with the IEA, the latest report of the United Nations Intergovernmental Panel on Climate Change also touched on fossil fuels.

“Limiting global warming will require major transitions in the energy sector,” said an IPCC press release accompanying the publication.

“This will include a significant reduction in fossil fuel use, widespread electrification, energy efficiency and the use of alternative fuels (such as hydrogen),” the IPCC said.

Commenting on the report, UN Secretary-General Antonio Guterres did not strike.

“Climate activists are sometimes portrayed as dangerous radicals,” he said. “But really dangerous radicals are countries that are increasing fossil fuel production.”

“Investing in new fossil fuel infrastructure is a moral and economic madness,” Guterres said.

“Such investments will soon become harmful assets – a stain on the landscape and damage to investment portfolios.”

It is ridiculous to think that we can immediately stop the production of fossil fuels: CEO

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