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Shell Chairman Jorma Ollila: emissions trade preferable to carbon tax

Helsingin Sanomat – Helsinki, Uusimaa, Finland

Outsider was impressed at environmental knowhow in the oil industry

Tuesday 10.3.2009

Jorma Ollila

Jorma Ollila


Fossil fuels such as oil, natural gas, and coal will remain the dominant sources of energy until 2030, believes Jorma Ollila, the former Nokia Chairman and CEO, who has been the Non-Executive Chairman of Royal Dutch Shell since 2006.
 
“I don’t think we have seen the peak point in oil production globally. There is more oil to be discovered through exploration, and more oil to be produced due to new technologies”, said Ollila in an interview for Helsingin Sanomat and a number of other media outlets, conducted [in English] at the Shell HQ in The Hague last week.
      
Looking ahead to the longer-term, to 2050 and beyond, the share of hydrocarbons as a source of energy will decline and renewable technologies will grow after a lengthy research and implementation phase, believes Ollila.
      
The use of hydrocarbons for fuel releases carbon dioxide into the atmosphere, which is seen as a factor in triggering climate change.
In Ollila’s view, in order to address the pressing climate change and environmental issues, there has to be a price put on carbon emissions.
The alternative routes to this end are twofold: either to deploy cap-and-trade in the form of something like ETS, the European Union’s Emission Trading Scheme, or to levy a direct carbon tax, for example on transportation fuels, as an incentive for people to burn less hydrocarbons.
      
Ollila is in no doubt as to which path he would prefer to see in his role as Shell Chairman:
      “In Shell we have taken the view that cap-and-trade is a more market-oriented system. Engineered well, it works better than direct tax, and it is politically easier to implement. If you look at politicians, it is very difficult for them to impose a tax on petrol”, says Ollila.
      
Ollila, who served as CEO of mobile phone giant Nokia from 1992, and as Chairman and CEO from 1999, took over as the first non-British and non-Dutch Chairman of Shell in June 2006.
He admits to having been rapidly surprised and impressed at the environmental knowhow on show in an industry that has often sought to portray itself as green, but is ultimately dealing in hydrocarbons, with all the problems associated with the environmental impact of fossil fuels.

“After having looked around for a few months, one of my first observations was: ‘Wow! These companies explore and produce hydrocarbons that supply 80 per cent of the energy needs of the globe. There is a CO2 impact, yes, but the companies are doing a lot more than is publicly known’. The attitudes within the companies, just the sheer knowledge of environmental impacts and climate change issues, their ability to have a dialogue with any environmentalist, any government official, any politician, is well beyond what I had expected. What is green? That’s open to debate. My observation, coming from the outside, [is that] this is an industry that is not only aware [of] what it is doing and what it has to do, but it is also addressing all its challenges.“
      
Ollila will be continuing for another year as the Non-Executive Chairman of Nokia, his former employer.
He is non-committal on how much longer he will maintain his association with the Finnish company he helped to turn into the world leader in the branch. “They wanted me to sign up for another year. That was very fine with my Shell colleagues and with the Shell Board, so here we are. No further comments”, said Ollila.
      
The transcript of the complete interview with Jorma Ollila can be found at the link below, and an expanded article by Juhana Rossi based on the interview will be included in our weeklies on Tuesday. 

See also:
  Interview with Shell Chairman Jorma Ollila, 4.3.2009 
 

Jorma Ollila 
Chairman of Royal Dutch Shell plc
Chairman and ex-CEO of Nokia Corporation
Non-executive director for Ford Motor Company 

Born in 1950. After school in Finland and the United Kingdom (Atlantic College) he earned a master’s degree in political science from the University of Helsinki, a master’s degree in economics from the London School of Economics, and a master’s degree in science from the Helsinki University of Technology. In 1995 he was awarded an honorary doctorate in political science from the University of Helsinki, and in 1998 an honorary doctorate in technology from the Helsinki University of Technology. In 2003 he was elected an Honorary Fellow of the London School of Economics, and was also awarded Honorary Membership of the Institute of Electrical and Electronics Engineers (IEEE).

 

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