IT HAS been a busy week. Global equity markets suddenly went into meltdown at the prospect of a US recession. Quite where the market traders have been living for the past six months is not clear. Then out of the blue, Jose Manuel Barroso, the mild-mannered president of the European Commission, threatened to impose carbon tariffs on US imports unless America agreed to limits.

With all this going on, I found it a calming experience to have breakfast with James Smith, the chief executive of Shell UK and a man who looks beyond the contemporary froth to see where the economy will be in 20 or 30 years' time.

Smith is both a physicist and an accountant, which lets him crunch the numbers while not getting carried away with techno-speak. He is also charming, erudite and fiendishly clever – not always attributes I associate with the heads of big companies. Shell is famous for having pioneered a technique known as scenario planning. This involves researching competing future trends and comparing them with each other. The aim is not to predict the future – which is impossible – but to identify and rank the possibilities.

This lets Shell prepare different action plans to be implemented to meet whatever actually transpires. In the next few weeks Shell will publish its latest scenarios charting the long-term future of the global economy – quite timely, given the turmoil in the markets. This made it very opportune to button-hole Mr Smith on what we are likely to discover. Shell's previous set of scenarios ("People and Connections") covered the world till 2020 and concentrated very much on social and cultural issues.

This probably reflected the generally benign economic climate and the fact that the world was more concerned with the so-called war on terrorism and poverty issues. However, the next set of Shell scenarios have taken a radically different direction and revert to major economic issues. Central to the analysis is climate change and global energy demands. Shell was the first of the oil majors to accept that climate change was happening and that something had to be done about it.


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