New Scare: The Carbon Bubble — Are $6 trillion in fossil fuel investment really going to go ‘poof’ because there is no global warming?

No one alive today will see the end of fossil fuel use.

From RenewEconomy:

Call it an act of the greatest folly, or simply one of greed. But it seems that the world’s energy companies are hell-bent on spending up to $6 trillion of shareholder funds and bank debt in the next decade on fossil fuel investments – assets that could well become stranded and worthless if the world acts to limit climate change.

7 thoughts on “New Scare: The Carbon Bubble — Are $6 trillion in fossil fuel investment really going to go ‘poof’ because there is no global warming?”

  1. Wind, solar, wave and biomass energy attracted $187 billion of investment capital in 2010 compared to $157 billion for natural gas, oil and coal, according to Bloomberg New Energy Finance’s latest data and calculations. A faster pace of wind and solar power installations, along with oversupply in various wind and solar power plant inputs, is driving installed costs lower, making these clean, renewable alternatives more competitive with coal using conventional cost and return on investment measures and methods, even given their increasingly glaring inadequacies.

    Trillion Dollar Baby

    Annual clean energy investment has increased nearly five-fold, from $52 billion in 2004 to $243 billion last year, a compound annual growth rate (CAGR) of 29%, according to Bloomberg New Energy Finance statistics. That’s forecast to double over the next eight years, to reach $395 billion a year, Bloomberg New Energy Finance reported Nov. 16.

    SOOOOOOOO:
    1) $157B in 2010 does NOT suggest $6T over 10 years
    2) We seem to be spending more on renewables and at a fast growth rate that spending of fossil fuels. WHICH IS THE REAL BUBBLE, THEN?
    3) But even adding both of these investment streams together, I can’t see $6T. Maybe Woody Allen was right: “94.37% of all statistics are….. MADE UP!!”

  2. Investment markets left free of external influence are quite good at pricing risk into the value of things. People who place their own capital at risk have every reason to do so. I’d guess they’re placing pretty much the right value on this “risk” now, i.e. no value at all.

  3. what will be stranded are the billions in wind turbines, solar panels, etc. In fact, the ‘stranding ‘ has already begun with the decrease in subsidies.

  4. Energy development has been a boom-bust system since technology became serious. In fact I think there was some boom-bust going on even when whaling was a major source of lighting fuels.
    That makes it easy for a journalist with much agenda and little knowledge to make energy investment look like a bubble. Energy has generally been speculative: the wells will or won’t produce, the prices will or won’t rise, the demand will or won’t. The development itself has a high-cost initial phase and then a lower cost during its main sequence of steady production.
    Energy itself is a sine qua non of what we now consider a decent lifestyle. Probably most people in industrial nations have reached a near-limit on our energy use; people who live in squalor are the ones whose energy use will increase and drive all kinds of things, good and bad.

  5. The article certainly does keep hammering the mystical 2°C climate temperature control by global regulation of known “carbon” reserves held by big companies. I’m sure developing economies are going to jump right into significant decreases in their growth to achieve this lofty goal. Surely the Chinese are ready to do this now.
    Another pipe dream about being able to control the climate if all we do is revert to the middle ages.

  6. We comment again and again about the junk science of global warming. However, what we see reported on this blog is not just junk science but junk journalism, junk economics and junk government as well.

  7. Once you believe the first lie, all the other lies follow. There’s no reason to believe that “business as usual” (doing nothing on Co2 emissions) will lead to more than a .3 degree C rise of temperature from here over the next 50-100 years (ie., to whenever levels reach 2X pre-industrial levels — about 560 ppm).

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