Would you invest in coal, oil and natural gas — or Solyndra?
The United Kingdom’s financial system is overexposed to corporate and pension fund investments in high-carbon fuels like coal, which risks becoming a stranded asset as the world makes efforts to move to a low-carbon economy, according to a new report.
The nonprofit Carbon Tracker Initiative, whose goal is to persuade companies to help tackle climate change by cutting their carbon footprints, asserted the London Stock Exchange has accumulated the equivalent of 106 billion metric tons of carbon dioxide emissions through investments globally in fossil fuels by its members, of which 45 billion metric tons is just coal.
Describing it as a “carbon bubble,” the Carbon Tracker report likens it to the dot-com crisis, when the sudden collapse of hugely overpriced Internet assets wiped billions off investment and share values.
“The carbon bubble could be equally serious for institutional investors — including pension beneficiaries — and the value lost would be permanent,” it says.
In a statement, the group said “serious reforms are required to key aspects of financial regulation and practice firstly to acknowledge the carbon risks inherent in fossil fuel assets and then take action to reduce these risks on the timeline needed to avoid catastrophic climate change.”
Anyone who has the notion that we’re going to move away from fossil fuels just isn’t paying attention.