The UK's fight against climate change needs to be overhauled because of the coronavirus outbreak, former Bank of England Governor Mark Carney warned today.
Canadian Mr Carney, who stepped down as the boss at Threadneedle Street last week after seven years, is now focused on his work as a United Nations climate change envoy and climate change adviser to Prime Minister Boris Johnson.
Countries are battling to keep their environmental targets on course in the run-up to the COP26 summit due to be held in Glasgow in November, despite the Covid-19 pandemic.
Speaking after the Chancellor's £330billion loan package to save the economy amid the grip of the disease, Mr Carney told the Lords' EU Financial Affairs Sub-Committee: “In this current health crisis we all have individual responsibilities, responsibilities for our own comportment, responsibilities for our families, for our neighbours, our communities – and then we have a responsibility to the best of our ability to discharge our work.
“That will be exceptionally difficult in certain sectors, which is why certain support packages have been put in place; one thinks of the retail sector, hospitality.
“In terms of policy development – and there are few areas of policy development more important than addressing climate change – we will do everything we can to continue to advance the objectives of COP26, and not just the objective but the legislation of the United Kingdom which is to transition to a net-zero economy by 2050.
“We do not see that there would be any modification of those objectives.
“How we go about achieving them will of course be modified as will be the case in your daily lives.
“We are in the process of amending our strategies to do that.
“It doesn't make it easier, to be clear.
“There is a heavy element of international diplomacy for which the Secretary of State assumes primary responsibility at COP, but of course the Prime Minister and Cabinet have that responsibility as well.”
He also warned of the threat to some firms as the economy moves towards the net-zero target.
“We believe the biggest risks are associated with transition,” Mr Carney told peers.
“These will arise from new regulations in order to accomplish our shared objective, they will result from new technologies that disrupt older, less green practices, and they will result from shifting consumer priorities.
“In that respect, those risks are first and foremost concentrated in longer term asset owners – pension funds and insurance companies – those those that have long duration to the assets.
“But fortunately (they) also have long duration to their liabilities, their obligations.”
Lords quizzed Mr Carney about fossil fuel giants BP and Shell, and the future of their businesses as motorists switch to electric cars and nations generate more power from wind, solar and tidal sources than oil and gas.
Mr Carney said: “Consistent with moving to net-zero, we all know an energy transition will be required.
“The best companies, and what we think is going to happen relatively quickly is every company, is going to have to a view of that transition and where they fit in.
“For some companies – and you mentioned BP and Shell – their view expressed in different ways is that they will be there at the end of that transition.
“But in order to be there at the end of that transition – in other words, to still be functioning and profitable and contributing to society – they will have to have fairly radical shifts to their energy mix and that is becoming core to their strategy.”
