Mark Carney, the former Bank of England governor, said Russia’s war on Ukraine and a deepening energy crisis will lead to a near-term increase in the financing of fossil fuels and a rise in greenhouse gas emissions.
The comments by Carney, who is now vice chair of Brookfield Asset Management and the co-chair of a global alliance that’s promised to end financed emissions, show that efforts to fight climate change are being complicated as geopolitical turmoil sets the agenda for capital flows.
“One of the things that's going to happen is that because of Russia's unjustified invasion and the response to that, there is going to be more investment in fossil fuels and financing of fossil fuels in the near term," Carney said in an interview Thursday from the International Monetary Fund’s spring meeting in Washington. “Near-term there's more emissions; this situation makes the job harder.”
Banks have so far been reluctant to acknowledge they’ll need to shelve their near-term climate goals in response to the war. Putin’s belligerence has turned Russia into an international pariah, with the West urgently trying to wean itself off the country’s oil, gas and coal. That’s put pressure on other producers to ratchet up supplies, in a development that threatens to raise emissions at the worst possible time for the climate. The United Nations Intergovernmental Panel on Climate Change recently issued a stark alert that the world's emissions must peak immediately to have a shot at keeping the temperature from rising more than 1.5° Celsius.