The climate crisis is certain to be a hot topic at the G7 summit in Cornwall.
A recent report by the International Energy Agency, a typically conservative advisory body, argued for an immediate ban on new fossil fuel projects.
But 51% of their COVID-19 economic recovery funds – a total of USD 189bn – paid between January 2020 and March 2021 were earmarked as financial aid for the fossil fuel industry.
Despite setbacks in volatile markets and oversupply risks, there is still a lot of money to be made from extracting, producing and selling hydrocarbons.
This puts G7 leaders in an awkward position.
Governmental support for the industry in the form of subsidies or tax breaks artificially inflates the profitability of fossil fuels, in turn making renewables a less attractive investment.
The fossil fuel industry continues to shed public support, but it can rely on the fact that it’s embedded within a complex system of consumers, suppliers and contractors, politicians and the media.
For a big oil company to make high-risk changes to its business model while others enjoy a free ride would be seen as a bad business decision.
Strong leadership – such as divestment from fossil fuels and strong support for renewables – would cause reverberations throughout the whole system.