“Ethical Markets research in our Green Transition Scoreboard® 2018 confirms this latest report on the size of the stranded fossil assets under threat, following the pioneer work of researchers at Carbon Tracker and 2 Degree Investing. We have been warning institutional investors of these risks since the UN Climate Summit in Copenhagen in 2009, with every annual update of our GTS. This reported on the annual private investments in green sectors worldwide and found over $1 trillion every year, including our cumulative 2018 total of $9.3 trillion. We also advised shifting at least 10% of their assets to renewable sectors that we covered, along with Mercer that recommended up to 40% shifts. This shifting has proved superior to divesting, since asset managers did not have all the green company opportunities in their algorithms and so would likely continue to follow these obsolete formulae.
Instead we threw asset managers a bone: strategic short-term advice to unpack their algos and see if their fossil assets were labeled as “fuel“, where they would be devalued as unusable in climate scenarios. Instead we suggested that with the stroke of a pen, they could re-label fossil reserves as “feedstocks” to be kept in the ground for future uses in plastics, cement, etc. see “Assessing Risks of Fossil Reserves: Are They Fuel or Feedstocks”? This would also prevent burning these valuable reserves and we now see carbon being re-categorized as a resource, see our GTS 2018: “CAPTURING CO2 WHILE IMPROVING HUMAN NUTRITION AND HEALTH” listing many start-ups in CO2 capture and use.
~Hazel Henderson, Editor“
‘Carbon bubble’ coming that could wipe trillions from the global economy
Demand for fossil fuels will decline in the near future with major macroeconomic and geopolitical consequences
- June 4, 2018
- Radboud University Nijmegen
- Unlike current expectations, new research suggests that the prospects of the fossil-fuel industry are not bright, and that its demise may have profound economic and geopolitical consequences. Relying on ground breaking modelling techniques, researchers show that the consumption of fossil fuels will slow down or decline in the near future, as a result of ongoing technological change, potentially exacerbated by new climate policies.
New research shows that the demise of the fossil-fuel industry has profound economic and geopolitical consequences. Relying on ground breaking modelling techniques, researchers from Radboud University, the University of Cambridge (C-EENRG), Cambridge Econometrics, The Open University (UK) and the University of Macau show that the consumption of fossil fuels will slow down or decline in the near future, as a result of ongoing technological change, potentially exacerbated by new climate policies.
This transition will result in clear winners, importers such as China and the EU, and losers, exporters such as Russia, the USA or Canada, which could see their fossil-fuel industries nearly shut down. If these countries keep up their investment and production levels despite declining demand, the global wealth loss could be huge: 1-4 trillion dollars, a loss comparable to that which triggered the financial crisis in 2007. Even the USA could not pull out from the transition, as it would only hurt itself even more. Global climate policy is therefore no longer a ‘prisoner’s dilemma’ game. These findings by researchers from Radboud University, the University of Cambridge (C-EENRG), Cambridge Econometrics, The Open University (UK) and the University of Macau are published in Nature Climate Change.