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As oil firms miss COP26...

Carney: ‘there is no instant fix to climate crisis’

Mark Carney

`Mark Carney: ‘an orderly transition is crucial’

Former Bank of England government Mark Carney says that abruptly cutting off fossil fuel firms won’t fix the climate crisis.

Mr Carney, who is the UN’s special envoy for climate and finance, says the idea of an instant fix is just not possible.

“It would be great if we could flip a green switch overnight,” he tells The Mail on Sunday. “We can’t. It’s very easy to sit there and look at an auto company or a steel company, and say, ‘You’ve got these bad emissions, I shouldn’t lend to you or I shouldn’t invest in you’. But only doing that will not get the emissions down.”

Mr Carney believes that banks and asset managers can play a big part in putting pressure on companies to shift quickly away from high carbon emissions in favour of cleaner energy, but argues that they need to be given time to make the change.

He adds that hitting net zero – the point at which the amount of carbon being emitted is no greater than the amount being removed from the atmosphere – will be “unimaginably expensive”. 

The latest estimate suggests the world will need to invest $100 trillion to reach net zero by 2050 and Mr Carney points out that only banks and other major investors have the means to provide the necessary finance. 

“An orderly transition [to net zero] is crucial,” he says. “Orderly doesn’t mean a slow transition, but it means coming off fossil fuels as we increase renewables and zero emission sources of energy.

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“It still is the case that for a period of time, in an orderly but rapid transition, there will be some financing of some fossil fuel assets.”

A report earlier this year found that the world’s 60 largest banks have handed out $3.8 trillion of finance to fossil fuel firms since the Paris climate deal in 2015. 

Last week Shell chief executive Ben van Beurden said the energy giant will not be attending the COP26 climate event as fossil fuel companies have been given no formal role.

Following its Q3 results he was asked whether oil, gas and energy companies like Shell were represented accurately or adequately at the summit.

He replied: “We are not represented. We were told that we were not welcome, so we will not be there – that’s probably all there is to it.”

He added that he would be outlining further thoughts on the climate conference and its outcomes in the coming days, but was hopeful that national representatives made “the right choices”.

He told a media briefing: “I do hope that indeed people who are representing the nations of the world there are going to make the right choices.

“There is lots of coverage on whether we should be hopeful or not hopeful – I will put my hopes on paper and you can see what I think about it.”

Mr van Beurden also expressed disappointment in the UK government’s decision not to award ‘Track 1’ funding to the Scottish Cluster, which includes the Acorn CCS and hydrogen projects.

Shell is the technical developer of the Acorn project, based at the St Fergus gas terminal near Peterhead, alongside partners Harbour Energy and Storegga.

“We had obviously hoped to be in the first tier of projects,” he said. “That is now a reserve position, which is a pity.

“I still think [Acorn] had very strong credentials. We are continuing to work on it and hopefully it will be promoted again to one of the Tier 1 positions, because as I said I think the credentials of it are very strong.

“I haven’t lost hope but, to be honest, I had hoped this would be a Tier 1 allocation rather than a reserve allocation.”

The UK government announced on 19 October that the Scottish Cluster, led by the Acorn project at St Fergus, would be on a reserve list behind the first two UK projects to be up and running by the mid-2020s.

The two schemes that have been awarded ‘Track 1′ funding are Hynet, backed by ENI, and the East Coast Clusters. Shell is also involved in the latter project via its participation in the Northern Endurance Partnership.

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