Climate action is becoming less of a priority around the world. Trump isn't helping
Some countries and companies put more emphasis on energy affordability and security
Larry Fink sends an annual letter to the bosses of all the companies in which he is invested, and a few years ago a major theme was decarbonization.
As chief executive of BlackRock, the world's largest asset manager, his message carries clout for investors and corporate leaders around the world.
His next letter is coming soon, and he's hinting there will be less of an emphasis on the environment and reducing emissions.
"I still believe in that, but I also caution that any decarbonizing technology right now is highly inflationary," said Fink, while speaking onstage this week in Houston as part of CERAWeek, a global energy conference.
Fink isn't alone in making this shift. The emphasis on climate action and transitioning to cleaner energy has waned in recent years as more emphasis is often placed on energy security and affordability.
And that was before Donald Trump returned to the White House.
Since then, the U.S. President has pulled the country from the Paris Climate Agreement and slashed climate grants. The Inflation Reduction Act, the clean energy program introduced by former president Joe Biden, is now in the crosshairs.
In addition, Trump has issued an order to revoke Biden's ban on oil and gas drilling in most U.S. coastal waters, and has also temporarily suspended new or renewed leases for offshore and onshore wind projects.
Altogether, hundreds of billions of dollars in clean tech and low-emission energy projects could be impacted, and ripple-effects could be felt around the world.
"Across the board we have to think about power and energy in a pragmatic way," said Fink.
A few years ago, climate was a major theme of the annual CERAWeek event as corporate and government leaders showcased their environmental progress and latest investments.
This year, it's noticeably absent from the conversation. Instead, the spotlight is on rising global demand for all types of energy, especially oil and natural gas.
'A side effect'
While on stage Monday, Trump's energy secretary Chris Wright called himself a "climate realist."
"The Trump administration will treat climate change for what it is, a global physical phenomenon that is a side effect of building the modern world," he said. "Everything in life involves trade-offs. Everything."
Increasingly, experts say the energy transition is going to be more difficult, costly and complicated than expected.
The shift by some energy companies away from decarbonization efforts is ongoing.
Five years ago, BP set some of the most ambitious targets of any large oilpatch company, including to cut production of oil and gas by 40 per cent by 2030 and significantly ramp up investment in renewables.
Now, that plan has been thrown out the window.
BP is shifting investment from renewable energy back to oil and gas production as part of a "reset" for the company, said chief executive Murray Auchincloss.
"The world has changed a lot," he said, while onstage in Houston. "As I visited governments around the world, it became clear that the two priorities in all countries that we operate were really affordable energy and reliable energy."
Spotlight on Trump
The diminishing priority of climate is noticeable, said Martha Hall Findlay, head of the University of Calgary's School of Public Policy. She's a former Liberal MP and recently held the role of chief climate officer for Suncor Energy.
"I take no pleasure in this. Climate change is a problem," she said, during an interview in Calgary.
"The fundamental change has been the election of Donald Trump," said Hall Findlay, pointing to his disdain for environmental policy, dismantling of green subsidies, promotion of more oil drilling, questioning the science of climate change and his alignment with Russia on the world stage.
"What are the priorities in a situation like that?" she said. "Unfortunately, it's not climate."
With Trump back in the White House, Dan Grossman of the Environmental Defense Fund was expecting a jubilant party atmosphere among the oil and gas industry at CERAWeek in Texas.
Instead, companies say they're still committed to climate efforts.
"We're certainly not seeing a lot of disputes and food fights," Grossman said in an interview with CBC News in Houston.
"We've made a lot of progress globally on the issue of climate change and methane mitigation and that's not just going to dissipate overnight," he said. "The people who are in office may have changed, but the science behind climate change hasn't changed."
Climate spend
2025 is expected to the first time ever that clean energy technology spending and investment supersedes upstream oil and gas investment, according to S&P Global Commodity Insights
"There are companies that are going to be deciding that climate is less of a priority, that sustainability is less of a priority and that they want to focus more on costs and short-term returns," said Roman Kramarchuk, head of climate markets at S&P, in an interview with CBC News in Houston.
At the same time, there's going to be other companies that see climate as being a way for them to exercise their capabilities and make money in that sense as well."
In the U.S., many state and local governments are continuing with their environmental policies to help address climate change.
For companies, they often make large investment decisions that will make sense a decade or two into the future, long after Trump is president.
"They see which way the world is going," said Samantha Gross, an energy security and climate analyst at the Brookings Institution, a D.C.-based think-tank. "I think they approach the energy transition with realism and understanding that it won't happen overnight."
Fink, the head of the massive money manager, is still optimistic about where the world is heading and how quickly technology is changing many aspects of the energy sector.
Still, inflation is top of mind for him right now, and decarbonization efforts don't always make financial sense.
"Everyone talks about the opportunity with hydrogen. Well, we can have green hydrogen and blue hydrogen, but is anybody willing to pay the cost?"
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