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It’s ridiculous to think we can stop fossil fuel production immediately: CEO

Fossil fuels are deeply ingrained in the global energy mix, and companies continue to explore and develop oil and gas fields in locations around the world.

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LONDON – CEO of Standard Chartered believes it is “ridiculous and naive” to think that fossil fuel production can be stopped immediately without any consequences, while asserting that although it may be good for the climate , but it will have other negative effects.

In the comments made in an interview with CNBC’s Geoff Cutmore at the Cities Week forum in London on Monday, Bill Winters admitted most people would subscribe to what he called a “simple transition”.

“Those are two words that are really important… both mean fair and doable,” he said. “And forward means forward – it means it takes a while.”

“The idea that we can turn off the faucet and end fossil fuels tomorrow is clearly absurd and naive,” says Winters. “Well, first of all, it’s not going to happen and second, it’s going to be very disruptive.”

Winters went on to say that would be good for climate change, but “not good for wars, revolutions, and human lives because you’ve… devastated.” He argues that the “final exit option” is undisputed.

Winters’ comments come at a time when the use of the term “recently transitioned” has become increasingly common in discussions related to climate change, energy, the environment and sustainability. .

Theme is a complex one, and the term itself has been defined in a number of ways. For example, the environmental group Greenpeace, described it as “move to a more sustainable economy in a way that is fair to everyone – including those working in polluting industries.”

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As a major bank with a presence in 59 markets, Standard Chartered is listed in London and Hong Kong. It has set out a plan to achieve net carbon emissions from its funded operation by mid-century.

According to Standard Chartered, the total The net on- and off-balance sheet weighting for the oil and gas industry is just over $20.65 billion in 2021..

From A to B

Achieving any kind of meaningful change in the planetary energy mix is ​​an enormous task.

Fossil fuels play an important role in developed and emerging economies, and companies continue to explore and develop oil and gas fields in locations around the world.

Any transition to an energy system and economy centered on renewable energy and low-carbon technologies will require large sums of money.

Along with the massive spending required, this kind of displacement will also radically change the way billions of people live and work.

For his part, Winters said “we have to transform” but questioned how best to achieve this.

“How do you balance that,” he said. “What’s the… best way to get from point A to point B and still make sure you’re carrying as much of the world’s power generation equipment as you can?”

It’s not good, he said, “to put a system in place where people just check it out,” going on to explain how he sees the reality of the situation.

“In many of the markets, in the emerging markets that Standard Chartered serves, if we told them that… one is, we’re about to get you and [two] you’ll pay for it well, they’ll say good… we won’t be part of that system. “

This serves nothing, says Winters. “Instead, we … need to bring them together in the most constructive way – the oil companies are part of that.”

“Some of the biggest sponsors of both the technological changes we are talking about and the protection of existing carbon sinks are fossil fuel producers,” he said.

“Why don’t we allow them to redeploy some of their equity — and in fact, a lot of their equity — into things that could make a big difference? I’m for someone who will support that whenever possible.”

A great debate

Winters’ remarks will excite climate activists and advocacy groups promoting an abrupt end to the fossil fuel era.

They also come as high-profile bodies such as the International Energy Agency are addressing the role of fossil fuels in the future.

In 2021, the Paris-based organization said “investment in new fossil fuel supply projects should not be made, and no further investment decisions are final for undiluted new coal plants.” .

Along with the IEA, the latest report of the United Nations Intergovernmental Panel on Climate Change also contains: consider the topic of fossil fuels.

“Limiting global warming will require major transformations in the energy sector,” the IPCC said in a news release accompanying its publication.

This will involve significant reductions in fossil fuel use, widespread electrification, improved energy efficiency and the use of alternative fuels (such as hydrogen), the IPCC said. ,” said the IPCC.

Commenting on this report, United Nations Secretary-General Antonio Guterres did not regret.

“Climate activists are sometimes described as dangerous radicals,” he said. “But the really dangerous radicals are countries that are increasing fossil fuel production.”

“Investing in new fossil fuel infrastructure is ethical and economic folly,” Guterres said.

“Such investments will soon become trapped assets – a blur of context and a portfolio failure.”

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