World Economic Forum: No Looming Energy Crisis

DAVOS, Switzerland, January 29, 2006 (ENS) - There are adequate world energy supplies, and the market and governing energy institutions will be able to absorb energy shocks, according to energy chief executives speaking at the World Economic Forum annual meeting that concluded today in Davos. More than 2,300 participants from 89 countries spent five days seeking workable responses to the global challenges of energy, environment and sustainable development.

"There is no reason for pessimism," declared Jeroen van der Veer, chief executive of Royal Dutch Shell, today at a press conference devoted to energy security. "Easy oil may have peaked," he said, but high oil prices are providing the public and private sectors with the incentive to invest in discovering alternative sources of energy which are in plentiful supply.

Jeroen van der Veer is chief executive of Royal Dutch Shell. (Photo courtesy Shell)

Climate change is the only problem "that has the power to end the march of civilization as we know it," former U.S. President Bill Clinton, told the conference on Saturday. He called for a "serious global effort" to promote clean energy.

High oil prices and the economic development in India and China are driving the search for alternative supplies of energy, the energy experts said. Diversification will alleviate pressures on world energy supplies, said Fatih Birol, chief economist and head of the economic analysis division at the International Energy Agency.

Governments and companies will have to diversify away from oil and gas, as well as away from traditional suppliers to find new markets, Birol said.

Mohammed Barkindo, acting secretary-general of OPEC, said that his organization "remains ready to step into the market." He pointed to the fact that the Vienna-based association of oil producers made its reserves available in the wake of Hurricane Katrina. "This shows that OPEC will step in at any time there is a shortage in the market because one of the key issues is market stability," he said.

Professor Klaus Schwab, founder and executive chairman World Economic Forum is to be knighted. UK Foreign Secretary Jack Straw announced the honor, for distinguished services to the causes of the environment and development, in Davos on Saturday. (Photo by Remy Steinegger courtesy WEF/Swiss Image)

"We have the mechanisms, machinery and institutions that can respond" to oil shocks," said Yergin, who does not foresee an oil shock unless there is a "massive recession."

OPEC does not believe nuclear energy to be a viable alternative option, while Birol said "climate change and energy security will see Europe and the U.S. look at nuclear much more closely."

Reflecting the rising global concern over oil markets, German Chancellor Angela Merkel spoke of Germany’s need for a new energy policy in her opening address to the Forum on Wednesday. "Good new environmental technologies can be a creative imperative," she reminded participants.

During the week new projects in disaster relief, hunger, anti-corruption, financing for development and public-private partnerships were announced.

"I was particularly impressed by this notion of 'I will'," said World Economic Forum Founder and Executive Chairman Professor Klaus Schwab. "That's what the purpose of this meeting is. The Forum will provide platforms for collaborative efforts so the new initiatives or ones that have been enhanced will be implemented," he told participants.

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, addresses the final plenary meeting today. (Photo by Dominic Büttner courtesy WEF/Swiss Image)

While global efforts to reach the United Nations Millennium Development Goals improved on some fronts in 2005, the world is still investing less than half the effort needed, according to a report released by the Forum's Global Governance Initiative. While there was progress in the areas of peace and security, poverty, hunger, health, and education, efforts in the environment and human rights slipped backwards.

The panelists agreed that the rise of the developing world is changing the balance of power. This makes it imperative that social imbalances are redressed, said James Wolfensohn, former head of the World Bank. "If we don't do that, we will not have a stable planet… and I think Davos is approaching these questions," he said.

Participants in a panel Friday sought to tackle concern for the environment as a bottom line issue. "We know what the problems are, but how are we going to bring them down to this bottom line?" asked John Elkington, chairman of SustainAbility, based in the United Kingdom.

Environmental standards should be linked to law enforcement because currently there is insufficient accountability, said Paul Ostling, global chief operating officer of the international accounting and consulting firm Ernst & Young, also based in the UK.

Klaus Toepfer, executive director of the UN Environment Programme, advocated price regulation as a possible solution, specifying that "If there is no price regulation, then you have overuse."

Former U.S. President Bill Clinton said globalization empowers private citizens to solve global problems of environment and development. (Photo courtesy WEF)

But Clinton said issues that "aggravate rather than promote equality" and the world's "enormous cultural and religious divides," are of serious concern.

"We have an ethical obligation, not only to our own taxpayer, but to people who need [aid money] to stay alive, to make sure it is spent in the most cost effective manner" and this is where the NGO movement can make a big difference, Clinton said.

In a public-private partnership effort, Nigerian President Olusegun Obasanjo, UK Chancellor of the Exchequer Gordon Brown and Microsoft Chairman Bill Gates Friday called on world leaders to rally behind a major new action plan to treat 50 million people and prevent 14 million tuberculosis deaths worldwide over the next 10 years.

The Global Plan to Stop Tuberculosis (2006-2015) released by the Stop Tuberculosis Partnership, a coalition of more than 400 organizations worldwide, calls for global tuberculosis spending to triple over the next decade to increase access to tuberculosis control programs and accelerate research on new tools to fight the disease.

Microsoft Chairman and Chief Software Architect Bill Gates took part in the session 'Digital 2.0: Powering a Creative Economy. (Photo by Dominic Büttner courtesy WEF/Swiss Image)

s An NGO partnership with private companies to combat disease was launched on Thursday when Bono and Bobby Shriver announced Product RED. The economic initiative is intended to deliver a sustainable flow of private sector money to the Global Fund to Fight AIDS, Tuberculosis and Malaria.

This is the first time that the world’s leading companies have made a commitment to channel a portion of their profits from sales of specially–designed products to the Global Fund to support AIDS programmes for women and children in Africa.

UK musician and philanthropist Bono during the Forum session Next Steps for Africa (Photo by Gian Vaitl courtesy WEF/Swiss Image)

Shriver, CEO of Product RED, said, "This is a long-term initiative designed for sustainability. It’s incredible to have the marketing brilliance of these companies behind the AIDS emergency."

Bono said, "People see a world out of whack. They see the greatest health crisis in 600 years and they want to do the right thing, but they’re not sure what that is. RED is about doing what you enjoy and doing good at the same time."

Davos participants looked ahead to the next round of World Trade Organization negotiations. Ministers meeting at the World Economic Forum set an April 30 deadline for agreement on specific details and time frames for further WTO negotiations, officially known as the Doha Development Agenda. The deadline must be formally approved by the broader WTO ministerial forum.

In the development debate on Friday, participants called for removal of agricultural subsidies that hold developing countries out of the marketplace. They sought to shake off "poverty fatigue" and follow through on the momentum and "mountain of good will" generated from 2005 toward the goal of eradicating poverty in Africa.

Actress Angelina Jolie, Goodwill Ambassador for the UN High Commission for Refugees, answers questions during the Open Forum session "Human Rights: Reduced to Charity?" (Photo by Andy Mettler courtesy WEF/Swiss Image)

Even with fair trade, the ability to "sell fish" will require physical infrastructure – roads and ports and electricity – to get to market in the first place, observed World Bank President Paul Wolfowitz. "The Bank is trying to get back into infrastructure projects" while avoiding "mistakes," red tape, environmental impacts and "white elephants" that often do as much harm as good, he told the conference.

Protests against the World Economic Forum took place across Switzerland in the run-up to the meeting. Actions began with a dance January 14 in Berne and a day of action on January 21 with protests in many Swiss cities. During the week the Forum was taking place in Davos, theatrical and militant demonstrations were staged against the capitalism in general and against the Forum in particular. On Saturday, demonstrations in Basel and Davos represented the only major mobilization this year.