Oil isn’t going anywhere: Tal

Global leaders brought green energy to the table in a big way last week.

That was a hot topic of discussion at the Rio+20 United Nations Conference on Sustainable Development, which wrapped last Friday. But Benjamin Tal, Deputy Chief of Economy Services at CIBC, doubts the leaders’ conversations will have any real-world impact.

“Although this is a step in the right direction to reduce the global economy’s dependence on oil, this is not something that will change the landscape of the energy market in any significant way, any time soon.”

Read: Green investment tops $3.3 trillion

While the world needs to move forward with developing renewable energy sources, the current economy is not conducive. “Being green costs money and when it comes to Europe, being green is secondary. Same goes for the U.S. and China,” says Tal.

“We have seen how dependent the world economy is on oil prices,” which should remain elevated because of limited supply and the current high demand from China.

Read: Are oil prices too low?

Emerging economies like India and China are rising extremely quickly, adds Tal, and the implementation of green technology will soften their abilities to grow.

Read: Eye on emerging markets

“However, mature economies like the U.S. and Europe are already slowing and rising at only to 2%-to-3%, so turning green is a bit easier and that’s exactly what we’re going to see.”