On June 1st, Total and five other major international oil and gas companies called for carbon pricing together. Total’s CEO Patrick Pouyanné explains the reasons behind an initiative that makes sense both economically and environmentally.
Total and five other major international oil and gas companies called for carbon pricing. Why?
Patrick Pouyanné / Because the climate is a precious resource. Putting a price on the factor that is harming it is a good way to influence the behavior and investments of businesses. Until now, the oil industry has been on the defensive. With this call, we’re going on the offensive. Our products may be responsible for one-third of CO2 emissions, but we can also provide solutions thanks to our innovation and financing capabilities. Did you know that if we converted all coal-fired power plants to gas-fired ones, we could avoid five billion metric tons of carbon a year? That's around 10% of global emissions. However, the price of coal has dropped to extremely low levels, leading the industry in Europe to close gas-fired power plants and favor coal-fired ones. The way to fix that is to put an ambitious carbon price framework in place. We hope to move the issue forward as part of the COP21 negotiations.
Aren't the pricing mechanisms already in effect enough?
P. P. / The World Bank has counted more than 60 countries and regions implementing carbon pricing mechanisms. These very different regulatory environments result in a lack of visibility that hinders capital expenditure and a distortion of competition. A single price is too much to ask, but coordination between the main economic regions would restore balance to the situation.
Isn’t the only response to climate change a shift to 100% renewables?
P. P. / We all know about the problems of competitiveness and intermittent availability that make all-renewables an economic non-starter for decades to come: the G7 is aiming for the end of the century. Our strong involvement in solar means we know what we’re talking about. However, countries such as India and China have every right to want to meet the very sharp growth in their energy demand today. We have to be honest about it: only fossil fuels will allow them to do so. So better gas than coal.