G7 summit: Why are major economies postponing a transition away from fossil fuels?

4 mins read  Sealuminati TeamJune 17, 2021

The G7 summit in Cornwall adds to the growing certainty about the climate crisis, which is already a hot topic.

Every leader of the world's rich countries has agreed on the importance of meeting the 2050 zero-emissions target. But, their unwillingness to change the fossil fuel business model greatly shows their faith.

According to IEA reports, a generally prudent advisory board advocated for an immediate ban on new fossil fuel projects. Investments by coal, oil, and gas companies to find a new source of energy are continuing, mobilizing the industry to weaken regulations.

By 2021, funds to develop new overseas coal projects will be devoted to them by the environment ministers of countries coming under the G7.

The fossil fuel industry reserved 51% (USD 189 billion) of the total COVID-19 economic recovery funds as financial aid between Jan'20 and Mar'21. To reduce emissions, USD 8 of every USD 10 is given to non-renewable energy companies.

Despite their volatile market drawbacks and excessive supply risks, hydrocarbons can be sold for a lot of money. The oil and gas demands in the next 14 to 21 years are foreseen to rise in countries with developing economies.

The G7 leaders are facing a dilemma, as they have to reboot their economic growth, and the energy sector with hefty demands can solve it. But, parallel extraction comes with pollution in developing countries.

Subsidies and tax breaks from governments unnaturally magnify fossil fuel profits, making investments in renewables less lucrative. In a nutshell, investment in oil and gas, for now, comes with less risk and more profit.

Being implanted within a complex system of contractors and suppliers, consumers, politicians, and the media, upon which the fossil fuel industry can rely and keep divesting public support. Unintended results are quite often in such complicated systems defined by cause-and-effect relations.

This mutuality is often termed as carbon lock-in. Fossil fuels have dominated the energy landscape, haunted by a lack of absolute change that has immortalized economic evolution.

BP, Shell, and Exxon Mobil, some of the kingpins of the oil industry, are uncertain about making the necessary changes until unison is restored among the rest of the systems. The bulk of the reserves of fossil fuels are owned by national oil companies and by fossil fuel companies that are small and private.

They do not come under the spotlight, which means more freedom to work. Furthermore, it would be a bad decision if the major oil companies took a big risk changing their business models, giving others a free ride.

People are seen to spend their entire career in the fossil fuel industry, initially starting to work from a geoscience or engineering student and ending on management positions, working all over the globe.

Under certain values, the identity of this industry is predicted. In the past, the existence of hydrocarbon exploration encouraged humanity to believe in the power of science and technology. Also, studies have found that the control of mankind over nature can drive growth and economic improvement.

Leaders in the fossil fuel industry have idealistic obligations to take on challenges to overthrow strong governments. The financial decisions made in preparation for the summit are clear indications that the G7 leaders are unprepared for the challenge.

The Cornwall meeting is their chance to announce the end of this comfortable relationship.