Why Our Continued Use of Fossil Fuels is Creating a Financial Time Bomb
upstart writes:
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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