Statoil Warns Politics Could Hamper Green Schemes

Statoil has warned that the bid to replace coal with low carbon energy sources could be jeopardised by geopolitical tensions.

The Norweigan group, who is the second largest natural gas producer in Europe behind Russian firm Gazprom, also highlighted the Brexit vote as one of the examples of threats to international co-operation.

The firm argued that countries may now place a bigger focus on energy security instead of tackling climate change because of this shift to a more volative multipolar world.

Statoil chief economist, Eirik Waerness, believes that a future of growing protectionism and regular political crises will make it more difficult to achieve global cohesion on the issue of carbon emission reductions.

Statoil laid out three scenarios in its yearly long term outlook, of which this was one, while the other two made more optimistic forecasts about reducing greenhouse gas emissions.

While the group did not state which scenario is most likely to happen, Mr Waerness did say during Wednesday’s briefing that the UK’s forthcoming exit of the European Union is the kind of event that ties into its most pessimistic outlook.

The report stated that a period of raised geopolitical rivalry would result in ‘growing disagreement about ‘the game rules’ and a lesser ability to manage environmental, economic and political crises.

If this scenario were to come to fruition, the reduction of carbon emission would be considered a low priority and agreements made on climate change, such as the one in Paris last year, would only be partly implemented.

Also featured in the synopsis was a weakening of international institutions (World Trade Organisation, Nato and UN), an economically stagnant Europe and a more isolated US.

In this geopolitical landscape, it is forecast that carbon emission would go up by 18% by 2040 and would continue to climb beyond this period, as predicted by Statoil.


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BDC 317 : Jun 2024