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Jeroen van der Veer is chief executive of Royal Dutch Shell. As leader of the World Economic Forum energy industry partnership in 2007-2008, he chaired this year's energy summit in Davos, Switzerland. He also chairs the Energy and Climate Change working group of the European Round Table of Industrialists.
Project Syndicate is an international newspaper association that distributes viewpoints from leaders of business, government, NGOs and academia and works to strengthen the independence and quality of printed media in developing countries.
The world faces two realities that will change forever how energy is used and where that energy will come from: global warming and voracious demand outpacing a dwindling supply. Jeroen van der Veer, chief executive of oil and energy giant Royal Dutch Shell, has little concern about the ultimate outcome: The transition to a variety of new energy sources and technological advances will be fully in place by the end of the century.
Van der Veer is deeply worried, however, about how we will arrive there, and he sees only two available courses. In one, governments at all levels and industry begin a serious, painful and coordinated effort to reduce emissions of carbon dioxide (CO2) and other gases that cause climate change, to conserve fuel and energy use and to spur development of new or underutilized energy sources. "Moreover, as calls for harmonization increase, policies converge across the globe," he says of what he calls the "Blueprints" scenario. "Cap-and-trade mechanisms that put a price on industrial CO2 emissions gain international acceptance. Rising CO2 prices in turn accelerate innovation, spawning breakthroughs."
The alternative, which he calls the "Scramble" scenario is far more bleak: Growing anxiety over diminishing supplies prompts countries to try to lock up existing energy supplies. "Energy security is a zero-sum game, with clear winners and losers," he warns. Because countries will fear losing competitive advantage to others, few will be willing to take the costly steps needed to control greenhouse gas emissions. Global warming and energy shortages, addressed only half-heartedly for so long, worsen dramatically. Far more severe and economically debilitating steps will be required to deal with the twin crises.
Taking the Blueprints path will require sacrifice, discipline and the committed leadership of government to work. "But it offers the world the best chance of reaching a sustainable energy future unscathed, so we should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age," van der Veer writes.
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