Fossil fuels are rooted in the global energy mix, and companies continue to discover and develop oil and gas fields around the world.
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LONDON – The CEO of Standard Chartered said it was “ridiculous and naive” to think that fossil fuel production could be stopped immediately without any consequences, saying that while it could be good for the climate, there would be others. negative effects.
Commenting in an interview with CNBC’s Jeff Cutmore at the City Week forum in London on Monday, Bill Winters acknowledged that most people would subscribe to what he called a “fair transition.”
“These are two really important words – it just means fair, it also means applicable,” he said. “And the transition means the transition – that 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.”
It would be good for climate change, Winters continued, but “bad for wars, revolutions and human life, because you would have chaos.” The “final sale option” had to be removed, he said.
Winters’ comments come at a time when the use of the term “fair transition” is becoming more common in discussions on climate change, energy, the environment and sustainability.
The topic is complex and the term itself is defined in several ways. The Greenpeace environmental group, for example, described it as “moving towards a more sustainable economy in a way that is fair to all – including people working in polluting industries”.
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A major bank with a presence in 59 markets, Standard Chartered is registered in London and Hong Kong. He has set out plans to achieve net zero carbon emissions from his funded activities by the middle of the century.
According to Standard Chartered, its total net on-balance sheet and off-balance sheet exposure to the oil and gas industry was just over $ 20.65 billion in 2021.
From A to B
Achieving any significant change in the energy mix of the planet is a huge task.
Fossil fuels play a crucial role in developed and emerging economies, and companies continue to discover and develop oil and gas fields in locations around the world.
Any transition to an energy system and economy centered around renewable energy and low-carbon technologies will require a huge amount of money.
Along with the enormous levels of spending required, this kind of change will radically change the way billions of people live and work.
For his part, Winters said “we must pass,” but questioned how this could best be achieved.
“How do you balance that,” he said. “What is the best way to get from point A to point B while making sure you bring as many transmitters around the world as possible?”
It was not helpful to “introduce a system where people just check,” he said, continuing to explain how he views the reality of the situation on the ground.
“In many of the emerging markets that Standard Chartered serves, if we tell them that … one thing, we’ll fuck you up and [two] you will have to pay for it well, they will say well … we will not be part of this system. “
That didn’t help, Winters said. “Rather, we … need to bring them together in the most constructive way – oil companies are part of that.”
“One of the biggest sponsors of both the technological changes we are talking about and the protection of existing carbon sinks is existing fossil fuel producers,” he said.
“Why not allow them to redistribute some of their share capital – and in fact much of their share capital – into things that can make a big difference? For example, I would support this at every opportunity. “
Great debate
Winters’ remarks will raise eyebrows and cause concern among climate activists and campaigns calling for a sharp end to the fossil fuel era.
They also come when high-ranking bodies such as the International Energy Agency address the role that fossil fuels must play in the future.
In 2021, the Paris-based organization said that “there should be no investment in new fossil fuel projects and no other final investment solutions for new non-shrinking coal-fired power plants.”
Together with the IEA, the latest report of the UN Intergovernmental Panel on Climate Change also addresses the issue of fossil fuels.
“Reducing global warming will require major transitions in the energy sector,” the IPCC said in a press release accompanying its publication.
“This will include a significant reduction in the use of fossil fuels, widespread electrification, improved 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 the really dangerous radicals are the countries that are increasing fossil fuel production.”
“Investing in new fossil fuel infrastructure is moral and economic madness,” Guterres said.
“Such investments will soon be blocked assets – a stain on the landscape and damage to investment portfolios.”
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