Roxanne Decyk: ‘More than governments needed to solve climate change’

The Shell executive says that businesses will need to work together with governments all over the world to successfully control global warming from burning fossil fuels.

Roxanne Decyk: Climate change, combined with the quest for enough energy for the globe, plus economic recovery, are hugely complex issues.

Roxanne Decyk is head of international government relations for Shell. Decyk said businesses will need to work together with governments all over the world to successfully control global warming from burning fossil fuels.

Roxanne Decyk: It’s really going to take more than governments alone to solve this problem. Industry, all industry, but my industry in particular needs to be able to provide expertise. And then government really needs to step in with solid regulatory frameworks so that we have clear signals on where we can invest to provide good solutions.

One regulatory framework proposed is cap and trade, which caps a country’s CO2 emissions and allows trading of permits to emit. Speaking for Shell, Decyk said it will provide incentive to lower emissions and encourage cleaner technologies, such as carbon capture and storage.

Roxanne Decyk: Carbon capture and storage is a way of taking CO2 from a heavy emitter source, like a power plant, or a cement plant, or a refinery, and either storing it underground in the appropriate geologic formations, or transferring it by pipeline to places that can use it effectively. We really look to Copenhagen to recognise carbon capture and storage, or CCS as it’s called, as an internationally accepted tool to mitigate CO2 emissions. And we also need decisions around funding it so that it’s funded and supported not just in developing economies, but in the developing world as well.

Decyk added that a price on carbon emissions together with seed money from governments would spur scientific innovation to eventually lower the cost of carbon capture and storage. Ms. Decyk spoke more about how governments alone, especially in a financial recession, won’t be able to solve the problems of climate change.

Roxanne Decyk: I think the complexity of this issue and the fact that it interacts with other issues – like energy security, and like recovery from the recession – really means that government can’t do it alone. I think we’re almost past the point where governments alone can solve any of the really complex problems facing society. And that’s why we at Shell feel so strongly that industry and others – including NGOs who have relevant experience, certainly the academic community, scientists – all need to collaborate with governments so that we can come up with solutions that really solve the problem, but also fit what we can accommodate as we recover from this recession.

Energy security for the world, said Decyk, relates to both the short and long term.

Roxanne Decyk: Energy security is something that we here talk about more and more, here in the United States, but frankly, almost everywhere around the world. And it has a couple of dimensions to it. One is the sort of immediate need to be sure that the energy you need to keep your society going is secure. But the broader issue is the one I’m really thinking of. Over the next 30 to 40 years, are we comfortable that we will have enough energy to meet the needs of a hugely growing world population and to help pull people out of poverty in the emerging economies? And we need to have a program to make sure that we are secure in our energy sources for the long term as well.

Decyk elaborated on what regulatory changes will be needed in response to a warming world.

Roxanne Decyk: There are no easy answers. At the very highest level, governments all over the world are looking at what kind of a program can we put in place that sets the mechanisms in motion to encourage efficiency, conservation, and mitigation of C02 emissions or even shifting towards these new portfolios. Two things that get talked about a lot are cap and trade – which is a way of capping, or setting caps on the CO2 or greenhouse gas emissions that will be acceptable in a particular country or region – and then devising a system so that credits for avoiding CO2 emissions can be traded. The alternative that gets talked about is a carbon tax.

Ms. Decyk shared her thoughts about what outcomes would be desirable to see in Copenhagen this coming December

Roxanne Decyk: For me, the most important thing that these leaders can do when they gather in Copenhagen is to make sure they don’t lose momentum against finding solutions. The overall policy structures which we hope will come out of Copenhagen will be very important, but we also need some nearer-term tools which we can begin to apply to actually reduce the amount of CO2 going into the atmosphere. One thing that we think can be very effective is something called carbon capture and sequestration. And we think we can make progress on that at Copenhagen if it’s part of the conversation in a structured way. We also think that we’re going to need to find a way to include carbon capture and sequestration as one of the mitigation efforts that the developing world can adopt. And that means that we need to have mechanisms, perhaps in the Clean Development Mechanism which came out of Kyoto, or potentially in some new kind of vehicle like a clean technology fund, so that we can make sure that developing economies have access to what can be an extremely effective mitigation tool over the next few decades.

She said incentives are also part of the picture.

Roxanne Decyk: Another feature of regulation that’s being talked about is a whole series of different incentives, sometimes tax incentives, sometimes technology funds that will accelerate the development of good renewable energy and the building of infrastructure. So how can we create incentives for entrepreneurs and companies to solve the technical problems that will bring down the cost and increase the efficiency of wind farms, solar, hydrogen potentially, and many other kinds of low and no CO2-emitting kinds of energies?

And she said carbon price is key.

Roxanne Decyk: One of the things that most businesses and many policy thinkers now agree is that a reasonable price on carbon – that is one that is just the right mix of high enough to be meaningful but low enough not to create undue pressure on economic recovery – is critical to helping us make good investments in the private sector toward this cleaner-energy future. What does that mean? Well, we have experience with the European trading system already with carbon pricing, and how carbon pricing can help drive good investment. We believe that that kind of a trading system which is also being experimented with in other parts of the world including the north-eastern part of the United States, if it can trade at a robust carbon price, something in the neighborhood of probably 40, or 30-40 dollars a ton for carbon, will create an environment where we get good decisions by business and good investment in not only technology but in infrastructure, that we’re going to need to move to these cleaner energy sources.

Investing on low carbon technology, though costly, should be manageable, said Decyk.

Roxanne Decyk: I believe that if we can structure the right policy and regulatory approaches, over time we will find ways to reduce emissions in the most efficient ways possible. One of the things that’s gotten an awful lot of conversation and certainly press over the last couple of years is something called an abatement curve. And it’s some work that’s been done by some very, very clever people, in modeling the most cost efficient ways to reduce energy emissions. And cost efficiency means least impact on the economy.

This podcast was made possible in part by Shell – encouraging dialogue on the energy challenge.

Jorge Salazar