The Oil Age will not end for lack of oil

Tatiana Valovaya has held the position of Director General of the UN in Geneva since 2019. An economist by training and a former journalist, the Russian diplomat has been, among other things, minister in charge of integration and macroeconomics at the Eurasian Economic Commission, which includes Belarus, Russia and Kazakhstan.

Political tensions remain at the top of the global agenda, from the situation in Ukraine to the disarmament conference in Geneva. So how can the fight against climate change be prioritised?

Climate change, and action against it, is a priority issue for the UN. But you are right, there are many other issues. However, on climate change, we are on the brink. If we don't act now, it will be too late tomorrow. Global warming is causing new tensions, military conflicts, social dramas. It is not a question of saving the planet, but of saving humanity. Planet Earth will still exist after us.

But if we look at the COP26 last year in Glasgow, little progress was made...

Finding solutions must be a priority and multilateralism gives us the necessary framework to do so. For the first time in history, humanity can decide its own future. Climate challenge is there, confirmed by science. If we do not contain global warming, we are heading for disaster.

The pandemic has shown that if you stop economic activity, the situation improves immediately. Take the blue sky seen over some previously polluted cities in India. But we can't stop everything or change the model overnight. We must find a balance between economic and social development and reduce our dependence on fossil fuels.

Among the 17 UN Sustainable Development Goals, two directly address the energy transition, SDG 7 (clean and affordable energy) and SDG 13 (climate action). UN reports show progress on the former, but deterioration on the latter. What leverage does the UN have to improve the situation?

Let me stress that you cannot choose one of these seventeen goals over another. Because they are all linked and have to be considered as a whole. Poverty, economic development and education should be addressed together. Some 2.8 billion people on Earth do not have access to clean energy to prepare their meals. Are we going to ask them to turn off their oven and let them starve? No. Instead, we must help them financially and technologically.

Couldn't countries where these people live skip the fossil fuel stage and go straight to clean technologies?

Yes, that's why the developed countries have pledged USD 100 billion to the least developed nations. Moreover, the SDGs are not just economic indicators. They call for a change of mindset and a sustainable approach to growth.

You are calling for a change of mindset, but real incentives are also needed. For example, wouldn't putting a price on carbon be a solution?

We need a fair price and also subsidies for clean energy. We also need to change our references. For example, GDP does not tell whether growth is clean or not. Yet this is the indicator on which governments campaign to get re-elected. This also applies to the financial community, which cannot aim for profit alone.

So would a carbon price be a good solution?

This is a complex issue because the situation is not the same in all countries. For example, some have abundant water resources while others have only coal. This is why the Paris Climate Agreement set out nationally determined contributions to reduce global greenhouse gas emissions by 45% by 2030 to limit global warming to 1.5 degrees Celsius.

At the virtual Davos Agenda in January, Chinese leader Xi Jinping told developed countries: "Cut your emissions first", because other countries still have to develop. Is he right?

Developing countries should not repeat the growth pattern of the advanced economies, and instead move directly to clean energy. They have a unique opportunity to adopt sustainable energy production from the start. 

But the Chinese president says he can pollute...

No, in fact China is committed to achieving carbon neutrality by 2060. Nobody is saying "let me pollute". We are in the same boat, as the pandemic has proven. Global solidarity must apply.

What message would you send commodity traders, especially oil traders, to help the world reduce CO2 emissions?

I come from a country that knows this issue well. There is also the old joke: “The Stone Age did not end for lack of stone!” In other words, the Oil Age will not end for lack of oil. Companies must think about the future, develop new energies, and use oil differently.

Before concluding, a word on international Geneva. What role does it play in accelerating the transition?

Its role is crucial, because about 50 organizations are active there, including the weather agency and the IPCC. Many discussions take place in Geneva. But there are also talks about financing the SDGs, as was the case in November during the Building Bridges week, which I hope will take place again this year. This bridge between finance and development is crucial.