Big energy clashes with John Kerry on how to fix climate change
BERLIN — Europe’s biggest energy companies clashed with U.S. Secretary of State John Kerry over who should move first on climate change, coarsening the debate on how to rein in air pollution that’s warming the planet.
In comments delivered to a conference in Paris, Kerry said the energy industry, through its command of jobs and wealth, holds the tools needed to fix the environment. The oil majors Royal Dutch Shell Plc and Statoil ASA joined utility RWE AG and chemical manufacturer Novozymes A/S in calling for government policies that would give them incentives to act.
The remarks were intended to feed into the debate about how to control global warming ahead of a United Nations-led effort to seal a historic emissions deal in December. Business and government officials are pushing each other to help boost ambition at the talks.
“What we really need is for the private sector to encour - age governments across the world to set ambitious emission targets and to set targets of their own,” Kerry told the conference by video on Thursday. “Only when we achieve that will we make the kind of progress that will actually put us on the path toward a more sustainable future.”
Energy companies said governments around the globe, and especially in Europe, must do more to develop a system that puts a price on the fossil-fuel pollution blamed for damaging the atmosphere — namely putting a price on fossil fuel pollution.
“The call for carbon pricing is unanimous,” Gerard Mestrallet, CEO of the French energy company Engie, said on a panel discussion in Paris. “It’s loud and clear. Carbon pricing is the right signal, the right tool.”
Those mechanisms include the European Union Emissions Trading System, a market for trading certificates permitting a certain amount of carbon dioxide emissions — effectively putting a price on the right to pollute. The system covers 11,000 industrial plants in 31 countries formed in 2005. It never has seen the prices needed to spur businesses to act quickly.
“We need a robust price of carbon,” Philippe Varin, chairman of the French utility Areva SA, said at the conference. “Necessity is the mother of creativity, and we definitively need a carbon price.”
In London, Shell was more blunt, saying that the targets Kerry is suggesting won’t be sufficient to make industry invest enough in cleaner forms of energy. Renewable energy reaped a record US$310 billion last year, a third of the $1 trillion a year the International Energy Agency says is necessary to control climate change.
“Targets will not be enough,” Shell CEO Ben Van Beurden said at the company’s annual meeting in London on Thursday. “What’s missing are policies that will help achieve these targets. What’s important is not just targets but how we’re going to get there. Putting a price on carbon is good. That will shift coal out of power generation and move gas in. It is an absolute key.”
Many of the executives at the Paris event backed that position, saying the current carbon pricing system isn’t delivering a price that would change the way they’re investing. EU carbon certificates closed Thursday at 7.35 euros ($8.17) a ton, well below the 30 euros to 60 euros most companies say is necessary to shift habits.