Myles Allen is on a mission to save Earth. Literally. The professor of geosystem science at the University of Oxford and director of Oxford Net Zero, does not care if institutional investors pour their cash into renewable energy or not. Yes, you read it right.
His answer to tackling climate change involves investing ‘safely’ in fossil fuels.
Given the meme of the past decade has resonated around all things ESG, the need to increase biodiversity, plant trees and switch to renewables, Allen’s ideas could be dismissed as farcical. But to do so, he argued, would be at everyone’s peril.
He said: “We need to reduce the amount of carbon dioxide we produce, but we also need to store more. So we need to start capturing the carbon dioxide generated and put it back in the ground. Those are the two big things we need to do to stop fossil fuels from causing global warming.”
While he gives faint praise to investors grappling with the ‘greening’ of their portfolios, he is clear that investing in solar or wind or hydro power, or increasing biodiversity, or putting a price on carbon “will not get us all the way to net zero”.
His answer, instead, is to introduce a ‘carbon takeback obligation’.
Allen said: “It is a very easy, simple regulation to introduce. Basically, a company that wants to use fossil fuels must be obligated to dispose of 100% of the carbon dioxide it generates.
“You need to be calling on governments to [introduce this new regulation] and ensure that the companies you’re investing in are complying with it. If we are going to be able to invest safely in fossil fuels going forward, we need to stop fossil fuels causing global warming before the world stops using fossil fuels.”
Allen’s views were amplified by Carlos Joly, Fellow, Cambridge Institute for Sustainability Leadership (CISL), who called for an all-out war on climate change.
His message was clear: “If we can pay for war, we can pay for war against climate catastrophe.”
Joly cited the multi billions of dollars spent on wars such as those in Afghanistan and Ukraine, and the billions earmarked to soften the pain of surging energy prices.
Joly, once a supporter of ESG initiatives, is now a sceptic. He said: “ESG doesn’t deliver on decarbonisation, or on the Paris Agreement. Why? Because it doesn’t require net zero.”
He believes that investors should place demands on companies to comply with net zero plans in the same way that they must comply with financial regulations.
He said: “Why not put within loan documents, warranties that companies have their net zero plan in place? And if the company doesn’t perform, it should be in default and shouldn’t be in our portfolios after 2025.
“We put pressure on them to deliver financial performance; we need to put pressure on them to deliver on net zero performance.”