FacebookTwitterGoogle+RedditEmail

Fossil Fuels and the Impending Market Crisis

by LEE HALL

Pension funds need to be asked to stop investing in oil, coal and gas–conventional and unconventional forms alike.

While visions of billions dance in CEOs’ heads, the rapid melting of Arctic sea ice and permafrost threatens to unlock methane emissions that will incur costs in the tens of trillions, much of it associated with floods, droughts and storms in vulnerable regions.  So why are financially affluent nations still spending hundreds of billions subsiding fossil fuels? The U.S. government facilitates carbon-related investments in other ways too; consider the special rules enabling oil companies to avoid sanctions if they happen to kill a polar bear in the Chukchi Sea when prospecting.

The economic comeuppance might not be instant, but it’s on the way.  The 2°C global carbon budget—a key climate-change goal agreed at UN-led talks in Copenhagen in 2009—has a ceiling of 545 gigatons in carbon dioxide emissions to 2050; today’s national and private reserves amount to three times that level. Past 2°C, there is a risk of nonlinear tipping elements. Even a less ambitious, riskier target of 3°C would restrict known fossil fuel reserves significantly.

Having developed a Carbon Tracker concept to “improve the transparency of the carbon embedded in equity markets,” Investor Watch  asserts that we must leave 60-80% of listed corporations’known fossil fuel reserves untouched between now and 2050 if we are to have an 80% chance of keeping our atmosphere within of an average 2°C over pre-industrial levels.

The International Energy Agency accepts that zero energy-related emissions by 2075 is needed. Investments in clean energy have to double by 2020, the IEA claims (with the spending offset by fossil fuel purchases spared). But at the same time, the IEA says: “Fossil fuels remain dominant and demand continues to grow, locking in high-carbon infrastructure.”

Investor Watch challenges this, asserting that the presumed assets lack the market value claimed on the balance sheets, and may wind up stranded rather than locked in. For example, coal plants may be left inoperative when emissions regulations and alternative fuels render them worthless.

Many investment advisers have no idea about their clients’ exposure to carbon assets. Call one and find out. A more formal example of helpful pressure would be a shareholder confronting a financial-services company with information about stranded assets, and asking for a response.

As the clock ticks up to the 2015 UN climate negotiations, the obvious will be stated: fossil-fuel reserves being sought by Big Oil would increase greenhouse gases disastrously. We need to support a low-carbon economy if worldwide climate-sustaining negotiations would succeed—as they must. It’s high time for bold measures to prevent further ocean acidification, sea-level rise, and loss of glaciers and ice sheets—sources of water and life.

That means we must stop the coal, oil and gas prospecting now, not tomorrow. And the sooner investments in fossil fuels stop, the less harm the “carbon bubble” will do.

Lee Hall is a candidate for Vermont Law School’s LL.M. in environmental law (2014). Previously, Lee taught animal law and immigration law, and worked for more than a decade in environmental and animal advocacy. Follow Lee on Twitter:  @Animal_Law 

 

Lee Hall, J.D., LL.M., is a hard-working adjunct professor with teaching experience at both private and public universities, who also works hard at a retail job for basic sustenance and health insurance.

More articles by:
July 25, 2016
Sharmini Peries - Michael Hudson
As the Election Turns: Trump the Anti-Neocon, Hillary the New Darling of the Neocons
Ted Rall
Hillary’s Strategy: Snub Liberal Democrats, Move Right to Nab Anti-Trump Republicans
William K. Black
Doubling Down on Wall Street: Hillary and Tim Kaine
Russell Mokhiber
Bernie Delegates Take on Bernie Sanders
Quincy Saul
Resurgent Mexico
Andy Thayer
Letter to a Bernie Activist
Patrick Cockburn
Erdogan is Strengthened by the Failed Coup, But Turkey is the Loser
Robert Fisk
The Hypocrisies of Terror Talk
Lee Hall
Purloined Platitudes and Bipartisan Bunk: An Adjunct’s View
Binoy Kampmark
The Futility of Collective Punishment: Russia, Doping and WADA
Nozomi Hayase
Cryptography as Democratic Weapon Against Demagoguery
Cesar Chelala
The Real Donald Trump
Julian Vigo
The UK’s Propaganda Machinery and State Surveillance of Muslim Children
Denis Conroy
Australia: Election Time Blues for Clones
Marjorie Cohn
Killing With Robots Increases Militarization of Police
David Swanson
RNC War Party, DNC War Makers
Eugene Schulman
The US Role in the Israeli-Palestine Conflict
Nauman Sadiq
Imran Khan’s Faustian Bargain
Peter Breschard
Kaine the Weepy Executioner
Weekend Edition
July 22, 2016
Friday - Sunday
Jeffrey St. Clair
Good as Goldman: Hillary and Wall Street
Joseph E. Lowndes
From Silent Majority to White-Hot Rage: Observations from Cleveland
Paul Street
Political Correctness: Handle with Care
Richard Moser
Actions Express Priorities: 40 Years of Failed Lesser Evil Voting
Eric Draitser
Hillary and Tim Kaine: a Match Made on Wall Street
Conn Hallinan
The Big Boom: Nukes And NATO
Ron Jacobs
Exacerbate the Split in the Ruling Class
Jill Stein
After US Airstrikes Kill 73 in Syria, It’s Time to End Military Assaults that Breed Terrorism
Jack Rasmus
Trump, Trade and Working Class Discontent
John Feffer
Could a Military Coup Happen Here?
Jeffrey St. Clair
Late Night, Wine-Soaked Thoughts on Trump’s Jeremiad
Andrew Levine
Vice Presidents: What Are They Good For?
Michael Lukas
Law, Order, and the Disciplining of Black Bodies at the Republican National Convention
David Swanson
Top 10 Reasons Why It’s Just Fine for U.S. to Blow Up Children
Victor Grossman
Horror News, This Time From Munich
Margaret Kimberley
Gavin Long’s Last Words
Mark Weisbrot
Confidence and the Degradation of Brazil
Brian Cloughley
Boris Johnson: Britain’s Lying Buffoon
Lawrence Reichard
A Global Crossroad
Kevin Schwartz
Beyond 28 Pages: Saudi Arabia and the West
Charles Pierson
The Courage of Kalyn Chapman James
Michael Brenner
Terrorism Redux
Bruce Lerro
Being Inconvenienced While Minding My Own Business: Liberals and the Social Contract Theory of Violence
Mark Dunbar
The Politics of Jeremy Corbyn
Binoy Kampmark
Laura Ingraham and Trumpism
Uri Avnery
The Great Rift
FacebookTwitterGoogle+RedditEmail