Royal Dutch Shell's chairman of the board told an audience at Washington's National Press Club that success at the UN Climate Change Conference in Copenhagen in December would have to involve a general agreement about a way to create a global price on carbon.
"We do not need definite signed agreements," said Jorma Ollila, who is also chairman for Finland's telecom behemoth Nokia. "We need some agreement which will bring us a further step toward a low-carbon economy. If there was a common acceptance that we need a price on carbon -- that would take us a long way."
The European supermajor has positioned itself as a strong supporter of cap-and-trade legislation at a time when most of the US oil and gas industry is either against the idea or supports an alternative carbon tax as a way to shift consumer behavior away from the use of fossil fuels.
He prodded the US and others countries to get closer to a successor agreement to the Kyoto Protocol treaty by the end of the year.
Last week, Shell's Chief Executive Peter Voser voiced support for legislation that would curb greenhouse gas emissions in the US (OD Oct.9,p1). A bill passed through the House of Representatives in June would cut emissions 17% by 2020 from 2005 levels and by about 80% by 2050.
Ollila reiterated Shell's support for a carbon market, adding that "prospects in the US Senate are far from clear. It is time for President Obama and the other world leaders to lead for the planet as well as their countries."
At issue are demands from richer nations that poorer countries do more to curb their greenhouse gas emissions. Meanwhile, emerging economies like India and China are seeking tens of billions of dollars in aid to help them lower their industrial carbon emissions.
US President Barack Obama is expected to roll out bilateral climate agreements with both China and India in November that may ease some of the negotiating pressure before Copenhagen. Last month, Energy Secretary Steven Chu said the Copenhagen event is not a "now or never" moment but is viewed by the administration as a way to continue momentum toward a low-carbon economy.
Ollila is the incoming chairman of the World Business Council for Sustainable Development and highlighted some of the broader difficulties for both businesses and government when dealing with resources development and climate change.
Population growth is expected to increase by about 50% by 2050 to more than 9 billion people, creating an environment where 85% of the globe's citizenry live in developing economies. The number of people living in urban areas will grow to 70% from about half the world's population today, he said.
Urban dwellers consume higher amounts of energy -- often driven by increased literacy -- than those living on subsistence agriculture.
Putting into context some of the challenges Chinese and Indian governments must deal with when negotiating climate change, Ollila said more than 60 very-large coal plants were commissioned in China in 2008 to meet growing demand for electrical power. In India, it is estimated that 30 Indian citizens each minute, or more than 40,000 each day, migrate to the country's burgeoning cities from the countryside, a trend that could continue for many years.
Given the dramatic changes wrought by the current era of globalization, "only the companies that practice sustainable development will be around for the long haul," Ollila said. "Those that don't will not be around to talk about it."
Bill Murray, Washington
