US President-elect Joe Biden will have to rebuild international relationships damaged during the current administration's reign in order to drive an ambitious climate change agenda, which will have repercussions for the domestic and global oil and gas industry.
“2020 has been a year of very limited international co-ordination and co-operation,” Mauricio Cardenas, a senior research fellow at the Center on Global Energy Policy at Columbia University, said at the Rio Oil & Gas 2020 digital conference on Tuesday.
“Given the challenges that we have — a pandemic, a global recession — it’s hard to understand why is it that the world has not been brought together, and the key player here is the G20," she said, referring to the Group of Twenty international forum including the US, the European Union, China and other key nations.
Cardenas noted that the US is currently lacking on two fronts that need large-scale co-ordination: the economy and its response to the coronavirus pandemic.
When former US president Barack Obama entered office following a recession, he helped co-ordinate a recovery within the G20. International relationships have since suffered under President Donald Trump's administration, who launched a trade war with China early in his tenure.
Tackling climate change will require a co-ordinated global approach, making repairing international relations crucial.
New priorities for Biden
When Biden enters the White House in late January, his administration will have to prioritise getting the pandemic under control and the economy back on its feet, a task in some ways similar to what Obama faced during the start of his presidency, founder of Columbia University’s Center on Global Energy Policy, Jason Bordoff, said on the same panel at the Brazil event.
Added to those top two priorities are another brace: addressing racial injustice and climate change, Bordoff said.
“That’s a significant shift and a signal that climate change intersects with the other three priorities,” he said.
“I think everything about how this administration thinks about addressing climate will be viewed through the context of economic recovery and supporting the US economy, and there is also a sort of historic reckoning with racial justice going on in the country that is important to mention as well.”
While making climate change such a top priority is new territory for the US, so was Biden's appointment of former US secretary of state John Kerry as climate envoy and as part of his national security team.
Bordoff, who served as an advisor in the Obama administration, said that announcing Kerry as part of the national security team “sends a signal that [the incoming administration views] climate change not only as an environmental issue but as an important foreign policy and security issue”.
Petrobras tackles energy challenge
Speaking on the same panel, Petrobras chief economist Rafaela Guedes said environmental and social governance policies are fundamental at the company and resonate with the push in the US to address social issues.
“We have been tackling all these issues, especially because it’s important and will continue to be important to provide energy — affordable energy, but at the same time clean energy,” Guedes said.
The state-controlled oil giant is also looking to increase its use of carbon capture, utilisation and storage technologies to drive down its emissions.
Petrobras has set a clear strategy of oil and gas production in ultra-deep waters that is cleaner and more efficient, while also pushing exports — including to China.
“We are positioning ourselves domestically ... and increasing relationships with other parts of the world,” she added.