Shell reaffirms commitment to 'sustainable development,' fighting climate change

March 13, 2003
Royal Dutch/Shell Group, the world's second-biggest publicly traded oil company, has reaffirmed its commitment to "sustainable development," with a special focus on combatting global climate change it says is related to consumption of fossil fuels.

Sam Fletcher
Senior Writer

HOUSTON, Mar. 12 -- Royal Dutch/Shell Group, the world's second-biggest publicly traded oil company, has reaffirmed its commitment to "sustainable development," with a special focus on combatting global climate change it says is related to consumption of fossil fuels.

The comments came in a presentation by Philip Watts, chairman of the committee of managing directors for Royal Dutch/Shell, at the inauguration of the new Shell Center for Sustainability at Rice University in Houston Wednesday.

Other presentations focused on the issues surrounding sustainable development in developing countries and the emergence of a new program for trading credits for greenhouse gas emissions.

The inauguration kicked off a 2-day conference at the center of industry, government, and academic representatives to study air, energy, and water issues.

Last July, Royal Dutch/Shell Group paid the first $500,000 installment of its $3.5 million endowment to establish the interdisciplinary Shell Center for Sustainability as a hub for collaboration by academic, industry, and government experts addressing a wide range of economic, societal, and environmental issues through the application of technology, market-based incentives, and other initiatives (OGJ Online, Aug. 27, 2002).

Shell's stance
At Wednesday's session, Watts reiterated his company's commitment to sustainable development of the world's natural resources, including "one of its most fundamental challenges, the complex threat from climate change."

Although that issue is complex and controversial, Watts said, "We stand with those who believe there is a problem, and that it is related to the burning of fossil fuels; we stand with those who are prepared to take action to solve that problem now before it is too late; and we believe that businesses, like Shell, can help to bridge differences that divide the US and Europe on this issue."

He said, "There is much we can all agree on if we focus on taking practical action today, rather than getting bogged down in the details of long-term plans that are bound to need changing. But business can only act within the right policy framework, which gives us the flexibility to react to developing understanding. And, of course, we look to government policies for this."

Developing nations concerns
"Sustainable development has become, among other things, a quest for synthesis between environmental welfare, local development, solidarities in each economic act, and a means of improving north-south hemisphere relations," said Guy Hascoet, a former French minister of state for social economy.

In his speech and subsequent question-and-answer session, Hascoet criticized government policies and industrial subsidies among developed nations that put undeveloped countries at a disadvantage in international trade. "The reality is cruel: We support the rule of the market when it is good for us and set up barriers and protection when it could be good for them," he said.

"There is no universally agreed definition of what is meant by sustainable development. Nor are all definitions of sustainable development sensible," said Malcom Gillis, president of Rice and a member of the National Academy of Sciences Board on Sustainable Development. Perhaps, he said, it "may be best defined as the path that maximizes the long-term net benefits to humankind, net of costs of environmental degradation."

Such an interpretation, said Gillis, "stresses not the need to limit development, but the need to develop sensibly in order to be better able to conserve. Sustainable development seems to make conservation the handmaiden of development while protecting the interests of future generations."

Poverty is the prime adversary of good ecological practices in poor nations, Gillis said. "Poor people in developing countries are far more dependent on their soils, rivers, fisheries, and forests than are citizens of rich countries. Therefore, degradation of resources and environment looms as a much larger threat to life and health in developing countries," he said.

Emissions trading program
The Chicago Climate Exchange expects to open a pilot trading program for sulfur dioxide and carbon dioxide emissions within 90 days to demonstrate that greenhouse gas emissions trading can achieve real reductions in emissions across different business sectors, said Richard Sandor, founder, chairman, and CEO.

The self-regulating exchange will operate on a set of principles agreed to by "28 North American greenhouse gas-emitting companies," said Sandor, a former vice-president and chief economist of the Chicago Board of Trade.

Peppered by questions about future policies and possible problems from some of the participants in the sustainability conference, Sandor compared himself and his pilot project to the Wright Brothers and their original aircraft: "I just want to get this airborne first," he said. "I'll worry about issues like passengers and tailpipe emissions later down the line."

Contact Sam Fletcher at [email protected]