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posted by janrinok on Thursday May 12, @11:15AM   Printer-friendly
from the don't-let-the-changes-get-you-down dept.

Why our continued use of fossil fuels is creating a financial time bomb:

We know roughly how much more carbon dioxide we can put into the atmosphere before we exceed our climate goals—limiting warming to 1.5° to 2° C above pre-industrial temperatures. From that, we can figure out how much more fossil fuel we can burn before we emit that much carbon dioxide. But when you compare those numbers with our known fossil fuel reserves, things get jaw-dropping.

To reach our climate goals, we'll need to leave a third of the oil, half of the natural gas, and nearly all the coal we're aware of sitting in the ground, unused.

Yet we have—and are still building—infrastructure that is predicated on burning far more than that: mines, oil and gas wells, refineries, and the distribution networks that get all those products to market; power plants, cars, trains, boats, and airplanes that use the fuels. If we're to reach our climate goals, some of those things will have to be intentionally shut down and left to sit idle before they can deliver a return on the money they cost to produce.

But it's not just physical capital that will cause problems if we decide to get serious about addressing climate change. We have workers who are trained to use all of the idled hardware, companies that treat the fuel reserves and hardware as an asset on their balance sheets, and various contracts that dictate that the reserves can be exploited.

Collectively, you can think of all of these things as assets—assets that, if we were to get serious about climate change, would see their value drop to zero. At that point, they'd be termed "stranded assets," and their stranding has the potential to unleash economic chaos on the world.

Do you agree with this arguably pessimistic assessment of the situation, and have we already run out of time to take the action necessary to avoid exceeding climate goals? Criticism is easy, but what solutions do you have to the problem?


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  • (Score: 1) by khallow on Friday May 20, @03:38AM

    by khallow (3766) Subscriber Badge on Friday May 20, @03:38AM (#1246485) Journal

    and deliberately producing massive amounts of stranded assets with what capacity we have left is outright evil at this point

    Thinking about this post some more, this is just plain dumb. Why would rich people deliberately produce massive amounts of stranded assets? They're not in this to lose money. Sure, I can see something like an idiotic government policy to create said stranded assets, but that can happen with any sort of asset.

    Instead we have considerable evidence that we actually have overly strong incentives against producing those assets (at least in the Western World where the concerns of this "financial bomb" are discussed) - like very few refineries built since the 1970s (I see repeatedly the claim that no refinery with "significant downstream unit capacity" has been constructed since 1977) and the obstructing of oil transportation infrastructure (like the successful blocking of Keystone XL). Not much point to worrying about stranded assets when the real problem is a dearth of said assets.