US Special Presidential Envoy for Climate John Kerry is calling for oil and gas companies to pull together others in the energy industry around clean energy.

Not because of politics or ideology, he said, but because of what data and science shows about climate change.

Opening CERAWeek by S&P Global, Kerry said there are vital business reasons for addressing greenhouse gas emissions and other factors that affect climate change.

He explained, for example, that earlier forecasts of a rise in the sea level by the end of the century are now expected to occur within 30 years.

“You don’t think that is going to change how you do business, and what the valuations of property are in business and supply chains? Of course it is,” Kerry said.

Oil and gas companies are expected to be key in accelerating the energy transition by commercialising key technologies.

Of 46 critical technologies identified by the International Energy Agency (IEA) as crucial to the energy transition, only two are on track to meet the agency’s net zero by 2050 scenario.

Many of these technologies are directly related to the oil and gas industry.

Kerry also said natural gas will be key to the energy transition, mostly to improve global energy security, as long as its emissions are abated.

Regions such as Africa, with areas lacking in reliable electricity, will especially benefit from natural gas in the energy transition.

“Gas will be key to the African countries, because African countries are about 48 countries that make up 0.55% of emissions in the world. And those countries have got to develop. In many cases, that will be a gas transition,” Kerry said.

A 1.5-degree target

As an increasing number of companies and countries commit to net zero targets by 2050, the gap widens between promised reductions in greenhouse gas emissions and action towards such reductions.

Coming out of COP26 in Glasgow, 65% of global GDP is under net zero targets, but we are currently on track for the world to increase in temperature by 2.7 degrees Celsius, Kerry said.

He explained that the IEA ran the numbers on the net zero plans, and if current promises are kept, the temperature increase could be limited to 1.8 degrees Celsius.

“The problem is we’re not doing everything. And now we have this major disruption in the marketplace, which is clearly going to have some impact,” Kerry said.

Kerry is encouraged by the amount of venture capital going into the energy transition, mentioning the six largest banks in the US committing to invest $1 trillion in the next eight to 10 years in the sector.

The investment through to the end of 2030 will be vital in preparing the economy to reach net zero by 2050.

“We have to do enough in 2020 to 2030 to be able to achieve net zero by 2050. Otherwise, you can’t get there, it’s too steep of a reduction,” Kerry said.

Ukraine in crisis

It is unclear how the current conflict in Ukraine and Russia will affect climate targets, but it is already drastically affecting oil prices, with Brent and West Texas Intermediate hitting their highest levels since July 2008 on Monday.

Kerry applauded oil and gas companies pulling out of Russia, despite the costs associated with the decisions.

“I think it’s clear we need to do exactly what we’re doing, what President Biden and allies are doing, which is stand up to this. And there may be costs,” Kerry said.

“The volatility of price and supply and demand is something we’re going to have to live with for a while.”

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