Lagarde warns of dark future for planet if climate change is ignored and world is ‘toasted and roasted’
Aramco chief reveals intent to invest in green energy projects
LONDON: The planet faces a “dark” future in 50 years if leaders fail to address climate change and growing global inequality, Christine Lagarde, head of the International Monetary Fund, said during a panel discussion at the Future Investment Initiative (FII) conference in Riyadh yesterday.
On climate change, she said the world would be “toasted, roasted and grilled, so decisions are needed at this point in time.”
She recognized advances in developing green energy sources, which would mean oil becoming a secondary commodity over the next half century, something KSA had taken on board.
On inequality, she flagged up imbalances between men and women — applauding, however, recent positive developments in the Kingdom. She also highlighted the lack of equality between countries, with a crossover between inequality and climate as nations in the firing line from climate change tend to be low-income economies.
Failure to address these two pressing issues could usher in a “dark” and “dystopian” world in 50 years, and one that “I don’t want to depict as it is too sad,” said Lagarde.
The FII conference is being hosted by Saudi Arabia’s Public Investment Fund, which has been charged with funding development projects in the Kingdom to help offset over-dependency on oil revenue.
The panel discussion was titled “The big shift: what new frameworks are needed to understand the future?”
Lagarde said: “If we address inequality and climate change things will look a lot better, but it will look different. (We might not have) the nation state anymore, it might be large mega-cities that will be the driving actors, it might be private sector actors. The new international order will require greater cooperation, monetary policy that might have more universal aspects to it, crypto currencies (but)I don’t want to bet on that.”
On the same discussion panel, Amin Nasser, president and CEO of Saudi Aramco, warned that global energy security could be jeopardized in five to seven years’ time if $1 trillion of investments in the hydrocarbon industry was deferred or canceled, as forecast by some experts.
Nasser reminded the audience that the slump in the oil price in 2014-16 to a low of $40 per barrel from a peak of about $100 per barrel came about only because of an additional 2 million barrels of supply came onto the market, highlighting how supply and demand could easily be brought out of kilter. Additional investment was needed, he said, to meet future demand growth.
Nasser said Aramco had noted the growth in electric vehicles (EVs), but they still represented less that 1 percent of the global car market and, although there would be additional growth, even the most bullish forecast was for only 530,000 EVs by 2040, compared to about 1.5 billion vehicles relying on conventional engines, he told the conference.
He added: “We are not worried about electric vehicles and renewables; we are looking to invest in green energy as it is a good sector — not only in the Kingdom, but also globally.”