The financial sector holds the key to accelerating a global transition toward renewable energy, a Qatar Foundation leader told an international discussion that focused on how the world can build back better from Covid-19 in an environmentally conscious way.
Omran Hamad al-Kuwari, CEO of Qatar Foundation International and a doctoral researcher at UCL Institute for Sustainable Resources in the UK, was among the experts who shared their perspectives on the changing face of global energy and business in a virtual seminar organised by international media organisation project syndicate, The Green Recovery.
In a session titled Closing The Circuit, al-Kuwari – who, as well as previously working in Qatar’s oil and gas industry, co-founded clean technology and renewable energy advisory business GreenGulf – told the panel, “The finance industry needs to be the key driving force – it can make it more expensive to build fossil fuels and more attractive to build anything clean.
“It’s happening, and it’s happening fast. The trends are all moving towards this. JP Morgan interviewed 50 global institutions with $13tn of assets for a poll, and 70% said Covid would accelerate this. It is now much easier to make the case for clean energy as technology has caught up, costs have come down, and the willingness is there.
“At a business roundtable featuring 200 companies recently, a group of CEOs from the likes of Amazon and Chevron publicly recommended introducing carbon pricing because they said they need it for certainty. It’s become a very different narrative, and a very different situation.”
However, he warned the energy transition could be “a tough adjustment” for many countries. “For exporters who depend on oil and gas for revenue, they will have to adjust to demand,” he said.
“Carbon tax adjustments will eventually come in one form or another, but they could be introduced in a progressive manner which incentivises, for example, lower carbon intensity sources of oil and gas, and encourages exporters to transition.
“People are responding and will be prepared for it, but there is no other way to say it than that there will be a structural financial adjustment, which we are seeing now in the Gulf. It will be challenging for all involved.”
Another challenge, according to al-Kuwari, is the “political economy”, with national oil and gas companies responsible for the majority of their countries’ revenues and having “an obligation to extract”, and developing countries now looking to monetise their hydrocarbon reserves. And he pointed out that while a green transformation may lead to “tough decisions like closing coal plants”, it may also “require decisions that are unpopular from an environmental perspective, such as nuclear power”.
But he added: “There is no way we can reach the goals of the Paris Agreement without energy companies at least playing their part, and they are under pressure from the financial industry, policymakers, and populations around the world to look at their entire emissions.”
Al-Kuwari was joined on the panel by Laurence Tubiana, CEO of the European Climate Foundation; José Antonio González Anaya, former CEO of PEMEX, Mexico’s state-owned petroleum company; and Jules Kortenhorst, CEO of US non-profit sustainability organisation the Rocky Mountain Institute. Speakers who participated in The Green Recovery included Gordon Brown and Kevin Rudd, former prime ministers of the UK and Australia respectively.
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