The current energy scarcities are so severe they could lead to social unrest across the world, Stephen Schwarzman, the billionaire co-founder and CEO of the investment firm Blackstone, said Tuesday. A number of global financiers have sounded the alarm on the unprecedented global energy crunch caused by a shift of focus of big fund houses on green energy projects.

Environmental, social and corporate governance (ESG) investing principles are prompting large financial institutions to divest their holdings in oil and gas companies that will add more carbon emissions to the environment. According to Schwarzman, this makes it difficult for the industry to raise funds for new wells and other energy sources. Big fund houses are instead focusing on funding projects that will help transition to the “green economy”. As a result, the production of energy is not keeping pace with rising demand.

The energy crunch is pushing gasoline prices to alarming heights with US oil prices hitting a seven-year high of $85 a barrel this week. Earlier this year, analysts at JPMorgan said about $600 billion investment is required in oil by 2030 to meet the rising demand.

“When you have a shortage, it’s just going to cost more and it’s probably going to cost a lot more. And when that happens, you’re going to get very unhappy people around the world, in the emerging markets in particular,” Schwarzman said at a conference in Saudi Arabia.

Echoing Schwarzman’s views, BlackRock Chairman Larry Fink said with governments and investors cutting investments in fossil fuels, oil prices will soon soar to $100 a barrel.

“Short term policy related to environmentalism, in terms of restricting the supply of hydrocarbons, has created energy inflation and we are going to be living with that for some time,” Fink said.

The global energy crisis is set to cast a shadow on the climate conference in Glasgow from October 31. World leaders from nearly 200 countries, climate negotiators, businesses, civil societies and international organisations will participate in the “COP26” international climate summit to chalk out measures to curb greenhouse emissions that are leading to the warming of the planet.

However, the energy crunch snarling the global economy and pressure from various governments could undermine the talks at the climate conference.

The surge in natural gas costs and shortages of coal have spiked electricity prices, which have tripled in some European countries compared to the previous year.

“The risk is that the price spike makes emerging economies -- for example India -- more reluctant to ditch coal because that would threaten energy security,” Bloomberg reported recently.

Hungarian Prime Minister Viktor Orban blamed the European Union’s green agenda for the rise in prices.

“The reason why the prices are up is the fault of the (EU) commission. So, we have to change some regulations, otherwise, everybody will suffer,” Orban had said earlier this month.

British parliamentarian Bim Afolami said a half-in, half-out approach in the energy transition will leave the world vulnerable.

“We have these visions we could go from a brown world and we could wake up tomorrow there’d be a green world, that is not going to happen,” Fink said.