DAVOS: Big oil firms came under pressure at the start of the World Economic Forum (WEF) from activists who accused them of hijacking the climate debate, while a Greta Thunberg-sponsored “cease and desist” campaign gained support on social media.

Major energy firms including BP, Chevron and Saudi Aramco are among the 1,500 business leaders gathering for the annual meeting in the Swiss resort of Davos, where global threats, including climate change, are on the agenda.

“We are demanding concrete and real climate action,” said Nicolas Siegrist, a 26-year-old organiser of the protest who also heads the Young Socialists party in Switzerland.

The annual meeting of global business and political leaders opened in Davos on Monday.

“They will be in the same room with state leaders and they will push for their interests,” Siegrist said of the involvement of energy companies during a demonstration attended by several hundred people on Sunday.

The oil and gas industry has said that it needs to be part of the energy transition as fossil fuels will continue to play a major role in the world’s energy mix as countries shift to low carbon economies.

On Monday, a social media campaign added to the pressure on oil and gas companies, by promoting a “cease and desist” notice sponsored by climate activists Thunberg, Vanessa Nakate and Luisa Neubauer, through the non-profit website Avaaz.

It demands energy company CEOs “immediately stop opening any new oil, gas, or coal extraction sites, and stop blocking the clean energy transition we all so urgently need”, and threatens legal action and more protests if they fail to comply.

The campaign, which had been signed by more than 660,000 people, had almost 200,000 shares on Monday morning.

Rising interest rates have made it harder for renewable energy developments to attract financing, giving traditional players with deep pockets a competitive advantage.

Recession

Two-thirds of private and public sector chief economists surveyed by the World Economic Forum (WEF) expect a global recession this year, the Davos-organiser said on Monday as business and government leaders gathered for its annual meeting.

Some 18 percent considered a world recession “extremely likely” _ more than twice as many as in the previous survey conducted in September. Only one-third of respondents to the survey viewed it as unlikely this year.

“The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” WEF Managing Director Saadia Zahidi said in a statement accompanying the survey results.

The organisation’s survey was based on 22 responses from a group of senior economists drawn from international agencies, including the International Monetary Fund, investment banks, multinationals and reinsurance groups.

The survey comes after the World Bank last week slashed its growth forecasts to levels close to recession for many countries as the impact of central bank rate hikes intensifies, Russia’s war in Ukraine continues, and the world’s major economic engines sputter.

Definitions of what constitutes recession differ around the world, but generally include the prospect of shrinking economies, possibly with high inflation in a “stagflation” scenario.

On inflation, the WEF survey saw large regional variations: the proportion expecting high inflation this year ranged from just five per cent for China to 57 per cent for Europe, where the impact of last year’s rise in energy prices has spread to the wider economy.

Not keeping pace

While a global slowdown would risk hitting investment in areas from education and health to tackling poverty and climate, some see it driving inflation down and forcing the US Federal Reserve and others to hold back from further rate hikes.

“I want the outlook to become a little weaker so that the Fed rates start going down and that whole sucking-out of liquidity by global central banks eases,” Sumant Sinha, chairman and CEO of Indian clean energy group ReNew Power, said on the sidelines of the Davos meeting.

“That will benefit not just India but globally,” he said, adding the current round of rate hikes was making it dearer for clean energy companies to fund their capital-intensive projects.

Others said that while more affluent people would likely escape the worst effects of recession on the back of high inflation levels, it would hit lower middle income groups hard.

Published in Dawn, January 17th, 2023