Carney’s fossil fuel pivot bewilders climate experts and business leaders

Mark CarneyAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTMark Carney’s fossil fuel pivot bewilders climate experts and business leadersCanadian prime minister’s legacy as one-time UN envoy and clean power advocate undermined by energy shiftMark Carney, as governor of the Bank of England, warned in 2015 that ‘climate change is the tragedy of the horizon’ © APMark Carney’s fossil fuel pivot bewilders climate experts and business leaders on x (opens in a new window)Mark Carney’s fossil fuel pivot bewilders climate experts and business leaders on facebook (opens in a new window)Mark Carney’s fossil fuel pivot bewilders climate experts and business leaders on linkedin (opens in a new window)Mark Carney’s fossil fuel pivot bewilders climate experts and business leaders on whatsapp (opens in a new window) Save Mark Carney’s fossil fuel pivot bewilders climate experts and business leaders on x (opens in a new window)Mark Carney’s fossil fuel pivot bewilders climate experts and business leaders on facebook (opens in a new window)Mark Carney’s fossil fuel pivot bewilders climate experts and business leaders on linkedin (opens in a new window)Mark Carney’s fossil fuel pivot bewilders climate experts and business leaders on whatsapp (opens in a new window) Save Ilya Gridneff in Toronto and Kenza Bryan in London PublishedDecember 13 2025Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Canadian Prime Minister Mark Carney’s embrace of fossil fuels to counter US trade hostilities is undoing his legacy in sounding an early alarm on climate change, say those once aligned with the former UN climate envoy.Since taking office this year, Carney has scrapped Canada’s consumer carbon tax, courted the oil and gas sector and axed a scheme to boost electric vehicle sales in response to US President Donald Trump’s sweeping tariffs.In recent weeks, Carney has also signed a deal to produce an extra million barrels of crude oil a day after pledging to double Canada’s liquefied natural gas production for new markets in Asia.Former environment minister Steven Guilbeault quit Carney’s cabinet in protest, while two founding members of the federal government’s Net Zero Advisory Body also resigned.“I could not compromise anymore and I fear we are heading in the wrong direction,” Guilbeault told the Financial Times.Climate experts and figures from business and finance say Carney’s decisions show how far national sovereignty and short-term energy concerns in the Trump era now outweigh action on global warming.Paul Polman, the former Unilever chief executive who champions responsible capitalism, said it was “not surprising” that Carney would make a “balanced pivot” as part of a political-economic compromise. But the “green industrialism” strategy to stabilise domestic politics and the economy came at the expense of delaying the deeper structural change needed.“From a climate-science standpoint, this risks undermining the urgency of emissions reduction,” he said. “Betting heavily on unproven massive-scale CCS [carbon capture and storage] and a cleaner-oil narrative while accelerating production . . . seems like a gamble with global emissions targets, and with the credibility of net zero by 2050. Gambling with firm science does not seem smart to me.”The fate of Mark Carney’s finance alliance was sealed after US President Donald Trump rolled back more than 70 US government climate measures © APThe fossil fuels shift marks a stark contrast from September 2015, when Carney, as governor of the Bank of England, warned in a landmark speech that “climate change is the tragedy of the horizon”. He then urged governments and regulatory bodies to facilitate the transition to renewable energy to prevent “catastrophic” consequences.“Once climate change becomes a defining issue for financial stability, it may already be too late,” he told the City of London gathering.Ben Caldecott, founding director of the Oxford Sustainable Finance Group, who helped author the UK Prudential Regulation Authority’s first climate change report at the time of Carney’s speech, said the address was critical in changing the agenda in the UK and beyond.“The fact a central bank governor and chair of the FSB [Financial Stability Board] was talking about climate change brought it into the realm of being a serious credible thing . . . suddenly it had more credence with finance ministries.”“The Bank of England could have just said: ‘we’ve checked that the vaults are safe from flooding and we’ve cut down on printing,’” he added.However, the central bank’s emphasis on climate-related financial disclosure and climate stress tests under Carney had a limited impact. “It took us down some tracks that were never going to be enough and were clearly disappointing,” Caldecott said.By 2021, ahead of the UN climate summit in Glasgow hosted by the UK, Carney was overseeing billions in renewable investments at Brookfield Asset Management as its head of environmental, social and governance and impact fund investing.He spearheaded the so-called Glasgow Financial Alliance for Net Zero (Gfanz), aimed at removing barriers to clean energy investments and promoting science-based climate commitments, launching a lofty goal for $130tn in investment from the financial sector by 2050.The fate of Carney’s finance alliance was sealed under Trump, with the rollback of more than 70 US government climate measures. A group of Republican attorneys-general heralded the pushback with legal action claiming such alliances distort competition.One by one, most of the financial sector subgroups involved suspended operations, as Trump denounced green energy. One of the most prominent backers of the finance initiative, BlackRock’s CEO Larry Fink, fell into step with the political shift and now promotes “energy pragmatism”. Carney was not alone in making the pivot in the Trump era, as many of the world’s largest banks continued to extend fossil fuel-related financing.Jeanne Martin, co-director of corporate engagement and head of banking programmes at ShareAction, said the campaign group’s past criticism of Gfanz members for falling short in delivering on their climate promises had “caused quite a bit of stir, which led to a call with Carney”. “Maybe we should have another version of that call [with Carney] where we’re the ones doing the telling off,” she said.Mark Carney’s wife, Diana Fox Carney, hosted the podcast ‘Carbon Hunters’ © Getty ImagesCarney’s shift is seen as especially striking given how seriously he and his family had taken climate change. His wife, Diana Fox Carney, is an economist and respected climate policy expert who hosted the podcast Carbon Hunters, and wrote about how voters could be persuaded to back carbon pricing.Catherine Abreu, who recently quit Canada’s net zero advisory body over Carney’s policies, said there was a “hope as PM he would be able to pull Canada’s economy into the future”.“The disappointment has been that he just wants to use the same playbook that we’ve seen previous Canadian governments use, which is to double down on natural resources that [are] already on their way out.”Carney’s memorandum of understanding with oil-rich Alberta, as part of a “grand bargain”, lays the groundwork for a new crude pipeline to the west coast, at a time when Canada produces a record 4mn barrels a day.Canada holds the world’s third-largest oil reserves but produces “the most carbon intensive crudes in North America”, according to the Pembina Institute, because Alberta’s oil sands extraction process emits more carbon than conventional drilling.Lisa Baiton, president of the Canadian Association of Petroleum Producers, applauded the regulatory rollbacks as “significant steps towards unlocking Canada’s vast natural energy resources and putting us on a path to become the world’s next energy superpower”. While Carney’s pact with Alberta includes a plan to secure industrial carbon pricing before April 1, it delays the province’s methane reduction target to 2035. Control of methane, the main component of gas, is regarded as the most effective measure in the short term in tackling global warming.The plan also suspends clean electricity regulations, cuts a proposed oil and gas emissions cap, and was signed without consulting coastal First Nations, which oppose any new pipeline project.All this comes as Carney’s government is off track to meet its 2030 emissions targets, Canada’s environment commissioner found. Carney said in his November budget that the country’s “net zero” plans were focused on 2050.“The prime minister has always been and remains a leader in driving stronger climate action,” said a spokesperson. “Next year, the government will build on its ambitious work to reduce emissions and build a stronger, more sustainable economy.” Keean Nembhard, a spokesperson for Canada’s environment minister Julie Dabrusin, said “fighting climate change, protecting communities and building Canada” were “top priorities” for Carney’s government. Nembhard cited Canada’s industrial carbon pricing system, clean electricity and methane-reduction regulations, and tax credits for clean energy as examples of Ottawa’s strategy to cut emissions. As part of trade negotiations with Washington, Carney is open to reviving the Keystone XL pipeline linking Alberta to Nebraska — cancelled by former US president Joe Biden on environmental grounds — to aid US energy security.Carney, who says he wants to produce “decarbonised oil”, is also turning to the Pathways Alliance, a C$16.5bn (US$12bn) industry-proposed carbon capture and storage mega-project, to counter emissions from higher crude production.Mark Campanale, CEO of the Carbon Tracker Initiative, which framed many of the risks expounded by Carney in 2015, said scaling up renewable projects to deliver free daytime electricity — using the Australian example — would be a better government strategy than encouraging the expansion of oil and gas.“We’re seeing governments like Canada, which are investing money in projects that might never be profitable, that go counter to their own climate objectives, and that’s really concerning,” he said. As a minority-government leader, he added, “maybe Carney has a cunning plan . . . but right now there is a sense of bewilderment in climate circles”.Carney’s effort on climate action, which was a foundation of his career of the past 10 years, now risks being erased within a year of his election to lead a G7 government confronting economic challenges.“Whether Carney has been a net positive for climate work in the last decade is a mixed bag, especially more recently,” Caldecott said. “There’s a sense that, because of things he’s done in Canada, maybe there’s a lack of authenticity — he said one thing at one time, and has completely pivoted.”Climate CapitalWhere climate change meets business, markets and politics. Explore the FT’s coverage here.Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets hereReuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article Climate change Add to myFT Oil & Gas industry Add to myFT Mark Carney Add to myFT Canada Add to myFT Ilya Gridneff Add to myFT Comments