European governments must push back against fossil fuel companies’ efforts to capitalise on the energy crisis by locking consumers into long-term dependence on hydrocarbons, former US vice-president Al Gore has said.
Countries are rushing to balance their green ambitions with the need to ensure energy security. At least €50bn of spending is planned by EU governments this winter on fossil fuel infrastructure and supplies after imports of oil, gas and coal from Russia plunged amid sanctions and restrictions imposed following its invasion of Ukraine.
“We must resist the efforts of gas and oil and coal sellers to lock in long-term increased dependencies on fossil fuels, which are accompanied by long-term increases in greenhouse gas emissions,” Gore told the Financial Times.
Gore, who co-founded sustainable investment fund management firm Generation Investment Management in 2004 with financier David Blood, said fossil fuel providers “will be looking to ensure as long a period for the contract as possible” in negotiations on supply agreements.
“Nations planning their strategies have to be on guard in all those negotiations, whether with private companies or sovereigns,” he added.
As winter approaches, the EU and member states are aiming to protect consumers from higher energy prices, while diversifying away from imports of Russian fossil fuels. Some of the measures proposed include a windfall tax on non-gas energy producers and a separate levy on oil and gas majors.
Gore said that mostly countries appear to be striking a “successful balance” but warned that governments must “take great care” to ensure they limit their fossil fuel-related expenditure “to programmes that will assist in the short-term supply crunch [but] will not lock us into decades of higher greenhouse gas emissions in the future”.
EU countries are increasing imports of liquefied natural gas from countries including the US and Algeria, with plans for as many as 19 floating storage and regasification unit projects at an estimated expenditure of €9.5bn.
The war in Ukraine had highlighted the urgent threat that a reliance on fossil fuels posed to global security and democracy, said Gore, arguing that such dependence exacerbated the geopolitical “instability that Russia is trying to worsen and the blackmail they’re trying to perpetuate”.
Gore accused fossil fuel companies of using “legacy networks of influence” to lobby for favourable political treatment, alleging that “they mimic the tobacco industry strategy of many decades ago — putting out false information on an industrial scale”.
Though renewables make up about half of the US electricity generation mix compared with the EU, Gore is confident that America will build momentum behind emissions reduction following the passage of the Inflation Reduction Act. He called the legislation, which includes significant measures to support green energy and infrastructure, “a historic event”.
Gore also waded into the debate around the backlash to environmental, social and governance investing in the US. Nineteen state attorneys-general, all of them Republicans, sent a letter to BlackRock last month, accusing the world’s largest money manager of prioritising “activism” over fiduciary duty to their state pension funds.
Gore said asset managers had a fiduciary duty to their clients “to maximise returns by using all the relevant factors that should be taken into account”, including non-financial considerations such as climate risk.
“I think it’s unlikely that courts will allow politically motivated officials to order asset managers to ignore clearly relevant factors,” he added.
Gore was speaking as Generation Investment Management published its annual sustainability trends report. It found that global carbon emissions from electricity generation could start to decline within a few years as renewable sources such as wind, solar and hydropower become a bigger part of the energy mix.
He said the shift to low-emissions vehicles had reached a tipping point, with electric and hybrid cars now accounting for nearly 10 per cent of the industry’s global sales.
But he warned that some stubborn problems — such as low levels of investment in clean energy, especially in developing countries, and shortages of minerals like lithium — needed to be resolved to speed up the low-carbon energy transition.
“We need to move quickly in spite of the geopolitical situation we’re facing — indeed, because of it,” he added.