‘‘The financial sector holds the key to accelerating a global transition toward renewable energy’’ a Qatar Foundation leader has said.

In a live virtual event discussion 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 was among the experts who shared their perspectives on the changing face of global energy and business.

The virtual seminar was organized by international media organization project syndicate, The Green Recovery

The pandemic has brutally reminded even the rich world that humanity has not conquered nature. By upending markets, work arrangements, supply chains, and public perceptions of risk, it has permanently changed the world in countless ways.

To focus on what comes next, Project Syndicate is convening a wide range of experts for a series of in-depth discussions on the path to a green recovery, with an emphasis on biodiversity, energy, public investments, and financial and corporate governance.

The panel of discussion included 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 organization 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.

In a session titled Closing The Circuit, Mr. Al-Kuwari said, “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; [US investment bank] JP Morgan interviewed 50 global institutions with $13tn of assets for a poll, and 70 percent said COVID would accelerate this. It’s 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 [a cost applied to carbon pollution to incentivize the reduction of greenhouse gases] because they said they need it for certainty. It’s become a very different narrative, and a very different situation.”

He stressed 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” 

“Carbon tax adjustments will eventually come in one form or another, but they could be introduced in a progressive manner which incentivizes, for example, lower carbon intensity sources of oil and gas, and encourages exporters to transition, ''he said.

“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.”

He further mentioned that another challenge 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 monetize their hydrocarbon reserves. 

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.”

“There is no way we can reach the goals of the Paris Agreement [to mitigate global warming] 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.

“That will really change things because it will drive up investment in low carbon technology, and also innovative solutions related to decarbonizing the hard-to-abate sectors. The energy transition is happening, and while it will take a long time, this transition is different from previous ones which tended to happen every 100 years or so,'' he added.

“This is a purposive transition – there is a reason why it is happening. We have a carbon budget gap to meet, we have climate change, and that will put the pressure on and accelerate things a lot. In sectors that are hard to decarbonize, you need to start thinking about research, development, and innovation, leadership, and ensuring you have the right incentives in place to start looking at large-scale hydrogen production, or carbon capture, or even negative emission technologies. In my opinion, that’s where the focus needs to be over the next 10 years,” he concluded.

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Cover Image Credit and Source: Qatar Foundation