Laying the path to better choices

Climate change demands urgent changes to the planet’s energy system. Making these changes means everybody making better choices: from individuals, to companies, to governments. The UN Climate Summit in New York is an opportunity to make progress. I’ll be there.

Greta Thunberg is going. Extinction Rebellion is going. And I am going too.

Political leaders will mix in New York with businesspeople like me, non-governmental experts and the financial community with the shared aim of tackling climate change.

Even so, the UN Climate Summit could well include some uncomfortable moments for the CEO of a major oil and gas company. I don’t expect everybody to welcome me. Or, at least, not in the way I would like to be welcomed. But I will go anyway.

The majority of the world’s greenhouse gas emissions are, after all, caused by the use of energy products. Climate change means the planet’s energy system must change. Urgently.

Making that change means everybody making better choices: from individuals, to companies, to governments. And there is a lot that a company that supplies energy, like Shell, can do to help.

The most obvious thing Shell can do is to change the mix of the energy products we sell. We can offer different, lower-carbon, energy products. And selling a mix of energy products with a progressively lower carbon intensity is exactly what Shell aims to do.

Radically different company

That will mean more low-carbon biofuels in the mix of things we sell, more renewable electricity and products like hydrogen too. That work is already under way. In fact, achieving our ambitions in this area would mean Shell becoming a radically different company to the one you know today.

No level of action taken by Shell, however, will be enough to tackle climate change. We are a big company – we supply around 3% of the world’s energy – but that still leaves the other 97%. And it is not even just about Shell and the other 97%. The supply of energy products is one side of things. The other side is energy consumption. Shell can offer lower-carbon products. We cannot make people buy them.

So I am going to New York because I believe greater international efforts are needed to make that choice easier for people to make. And that is what I will be working on in New York, taking the opportunity to speak to – and understand the perspectives of – leaders and experts, finding ways we can work together.

Some of the answer comes down to governments, even as they continue to act on the promises they made as part of the Paris Agreement. Governments can provide regulation and consumer signals – like well-designed, well-balanced taxes – as well as incentives, like grants to help buy electric cars.

The world also needs government-led carbon-pricing mechanisms to encourage low-carbon choices. I cannot overstate the need for immediate action on this. A global emissions trading system, as described by Article 6 of the Paris Agreement, is essential. I will continue to make the case for this in New York.

But government-led carbon-pricing will not be enough on its own to shift large parts of the energy system. What we need is co-ordinated action to drive an international industrial transformation on an unprecedented scale. This is not just down to governments.

Alongside governments, businesses have a significant role to play. Businesses like Shell which supply energy. And businesses in sectors that use energy: from shipping to finance, aviation to chemicals, steel to cement. The urgency is such that we must all come together, sector by sector, to work out how to decarbonise each sector’s energy use.

Three ways to make progress

Each sector that uses energy is different, and some are highly fragmented, so the actual action needed in a sector will vary. All sectors, however, share the same three ways to make progress.

First, improve energy efficiency. Second, turn to lower-carbon energy products. Third, offset or store away emissions that cannot be avoided.

So, coalitions should work on which fuels can be used and on how efficiently they are used. In powering transport for example. A hydrogen fuel dispenser, obviously, needs hydrogen-powered vehicles. And how light is the vehicle? How efficient the motor?

Or take shipping. If we, as society, want to take greenhouse gas emissions out of the shipping sector, we had better work together - shipping companies, ports, fuel suppliers, ship builders, governments: all of us. And we will need another coalition to do the same for the next sector, and the next.

That is not to say any of this will be easy.

There will be many challenges for coalitions of businesses, no matter what sector they are in. Market distortions, regulatory frameworks, the need to allow countries to develop as others already have. Indeed, the developing world must have the energy it needs to build a better future, free of poverty, even as work continues to tackle climate change.

So decarbonising energy use will not be easy. But I go to New York with hope, determination and a strong sense of urgency.