EXECUTIVE PERSPECTIVE: Preparing for the end of the Oil Age

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“In 50 years, when we might have the last barrel of oil, the question is: when it is shipped abroad, will we be sad? If we are investing today in the right sectors, I can tell you we will celebrate at that moment.”

Climate change is full of surprises these days. Most of them are not pleasant.

Emissions are increasing again. Catastrophic storms which are only supposed to happen once in millennium are now happening once every few years. Leadership is fragmenting, with key nations backpedaling from the Paris Climate Accord. And in a new Reuters report publishing in early February, the largest 250 corporate emitters of greenhouse gases are revealed, with a few exceptions, to be largely not planning any significant reductions in their emissions.

We are in trouble. And we need leadership, in particular from the most carbon intensive business models of the planet.

One example of leadership on setting decarbonization goals with a plan to accomplish them comes, perhaps surprisingly to some observers, from the United Arab Emirates. Unlike most carbon intensive businesses of the world, the Emirates is public and specific on its plans, with a strategy which “aims to increase the contribution of clean energy in the total energy mix from 25 per cent to 50 per cent by 2050 and reduce carbon footprint of power generation by 70 percent.”

In addition, the Emirates is building a new knowledge economy around its Masdar model, which is leading the way towards integrating renewable energy and sustainable city planning at increasing scales across the globe. And the leadership on this economic diversification plan is being fully taken up by the next generations, who are just now inheriting the responsibility to make this all happen.

Grandson of the President of the UAE and Chairman of the investing and advisory services firm Alliances for Global Sustainability, Sheikh Zayed bin Sultan bin Khalifa Al Nahyan is unequivocal about the mission ahead: “As the Crown Prince of Abu Dhabi, His Highness Sheikh Mohamed bin Zayed Al Nahyan said: “”“in 50 years, when we might have the last barrel of oil, the question is: when it is shipped abroad, will we be sad? If we are investing today in the right sectors, I can tell you we will celebrate at that moment.”” Like many economies, we have built our nations largely from hydrocarbon energy. Now we all know that that model cannot persist without destroying the very planet which has provided this wealth. We must change our habits, and it will not be easy. But it must be done.”

And his sister, Sheikha Shamma bint Sultan bin Khalifa Al Nahyan, who is CEO of the same firm, is equally adamant. “This is about both the ethical duty to take care of the land which our forefathers so deeply appreciated as well as the competitiveness of our economy over the next few decades. Economic resilience for our generation and the generations to come will be found by building wealth while at the same time building a healthier planet. Those who do not start planning now, will not be ready for this new economy.”

These are wise words from two young leaders of a country with so much to lose and gain in the decades ahead. Like many economies, the UAE is facing significant challenges with increasing numbers of young people entering the workforce. Old industrial models cannot support the necessary levels of employment. Education and investment in new clean sources of energy, infrastructure and the expertise are part of a green “new deal” of sorts in the Emirates. Given that this would likely only be happening if it had to, the world should look carefully at this example.

Sheikha Shamma sums up the dilemma. “Either do what is both right and wise, or our environment will face inevitable decline. It was not that long ago for us when our forefathers lived in the desert. Our planet and lives are more fragile than we think and our resources are finite. The human family must start now on a new and difficult journey towards a more sustainable world.”

And for the human family to have a chance at living in a world agreed by the Paris Accord, we will need that journey to begin in all carbon intensive business models, many of which show little sign of taking a first step.

Reference: https://blogs.thomsonreuters.com/sustainability/2019/02/03/executive-perspective-anticipating-the-end-of-the-oil-age/

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