Quantcast

UN Climate Chief: Carbon Bubble Is Now a Reality

Climate

The so-called "carbon bubble" is no longer a concept, it's a reality, according to UN climate chief Christiana Figueres, who will oversee the crucial UN climate conference in Paris in December.

Investments in fossil fuels are becoming a losing bet as the so-called "carbon bubble" bursts.
Photo credit: Shutterstock

Investors who sunk their money into the fossil fuel sector are going to come up losers, she suggested, as plummeting oil prices have made new extraction projects too costly to continue to pursue and concerns about global warming have made them too risky.

"A lot of the stranded asset conversations we’ve been having for a long time are now coming true,” she told RTCC, speaking from the World Future Energy Summit in Abu Dhabi. “Those expensive oil projects—deep sea, Arctic, tar sands—those are actually beginning to be taken off the table because of the low oil prices.”

That's good news for the environmental groups that have long warned about "stranded assets"—coal, oil and gas that would have to be left in the ground to slow climate change—and how that was leading to an overvaluation of these reserves.

RTCC cited a number of expensive exploration and extraction projects that have already been cancelled. Chevron has delayed plans to drill in the Canadian Arctic. Norway's Statoil has returned three licenses to explore for oil off the Greenland coast. And Shell and Qatar Petroleum announced last week they were scrapping a planned $6.5 billion petrochemical project in Qatar, saying it was "commercially unfeasible, particularly in the current economic climate prevailing in the energy industry." Qatar's state-controlled petrochemical company Industries Qatar abandoned plans for another $6 billion plant last September. Many of these projects were planned when oil was $100 a barrel. It's now under $50.

In the U.S., Texas is feeling the brunt of the oil bust, as extraction companies lay off workers. The New York Times reported yesterday, "With oil prices plummeting by more than 50 percent since June, the gleeful mood of recent years has turned glum here in West Texas as the frenzy of shale oil drilling has come to a screeching halt. Every day, oil companies are decommissioning rigs and announcing layoffs. Small companies that lease equipment have fallen behind in their payments." And the once seemingly unstoppable growing of fracking in North Dakota's Bakken shale region has also come to a screeching halt.

Carbon Tracker Initiative, a independent nonprofit think tank that analyzes energy from both an environmental and financial standpoint, coined the term "carbon bubble" and has continuously warned investors about the risks of sinking money into fossil fuel-related businesses, due to the 2c target of limiting global warming to 2 degrees to stave off the worst impacts of climate change.

"If the 2C target is rigorously applied, then up to 80 percent of declared reserves owned by the world’s largest listed coal, oil and gas companies and their investors would be subject to impairment as these assets become stranded,” the group said in its report Unburnable Carbon.

Figueres told RTCC she believed investors and investment firms would be taking notice, opening up the possibility that investment assets might begin to shift more decisively to renewables.

“When you begin to see very specific examples of a concept that was previously only a concept, I do think it’s going to be taken much more seriously on the part of investors,” she said. “That volatility in prices is one that incrementally and gradually makes investment in oil and gas more risky than investment in renewables, where it is very predictable what the upfront cost of infrastructure is, and then the price of fuel from then on is very predictable and certain.”

YOU MIGHT ALSO LIKE

Plunging Oil Prices Trigger Economic Downturn in Fracking Boom Town

OPEC Decision Likely to Crash U.S. Fracking Industry

OPEC Wants to “Crush U.S. Shale”

EcoWatch Daily Newsletter


YinYang / E+ / Getty Images

In a blow to the Trump administration, the Supreme Court ruled Monday to uphold a Virginia ban on mining uranium, Reuters reported.

Read More Show Less
Ragú Old World Style Traditional is one of three flavors named in a voluntary recall. Mike Mozart / CC BY 2.0

Spaghetti with plastic sauce? That's what you might be eating if you pour one of three flavors of Ragú sauce over your pasta.

Mizkan America, the food company that owns Ragú, announced Saturday that it was voluntarily recalling some Chunky Tomato Garlic & Onion, Old World Style Traditional and Old World Style Meat sauces because they might be contaminated with plastic fragments, The Today Show reported.

Read More Show Less
Sponsored
A dead sea lion on the beach at Border Field State Park, near the international border wall between San Diego, California and Tijuana, Mexico. Sherry Smith / iStock / Getty Images

While Trump's border wall has yet to be completed, the threat it poses to pollinators is already felt, according to the National Butterfly Center in Mission, Texas, as reported by Transmission & Distribution World.

Read More Show Less
People crossing the Brooklyn Bridge on July 20, 2017 in New York City sought to shield themselves from the sun as the temperature reached 93 degrees. Drew Angerer / Getty Images

by Jordan Davidson

Taking action to stop the mercury from rising is a matter of life and death in the U.S., according to a new study published in the journal Science Advances.

Read More Show Less
Salmon fry before being released just outside San Francisco Bay. Jim Wilson / The New York Times / Redux

By Alisa Opar

For Chinook salmon, the urge to return home and spawn isn't just strong — it's imperative. And for the first time in more than 65 years, at least 23 fish that migrated as juveniles from California's San Joaquin River and into the Pacific Ocean have heeded that call and returned as adults during the annual spring run.

Read More Show Less
Sponsored
AnnaPustynnikova / iStock / Getty Images

By Kerri-Ann Jennings, MS, RD

Shiitake mushrooms are one of the most popular mushrooms worldwide.

Read More Show Less
Protesters hold a banner and a placard while blocking off the road during a protest against Air pollution in London. Ryan Ashcroft / SOPA Images / LightRocket / Getty Images

By Jessica Corbett

Dozens of students, parents, teachers and professionals joined a Friday protest organized by Extinction Rebellion that temporarily stalled morning rush-hour traffic in London's southeasten borough of Lewisham to push politicians to more boldly address dangerous air pollution across the city.

Read More Show Less

Jose A. Bernat Bacete / Moment / Getty Images

By Bridget Shirvell

On a farm in upstate New York, a cheese brand is turning millions of pounds of food scraps into electricity needed to power its on-site businesses. Founded by eight families, each with their own dairy farms, Craigs Creamery doesn't just produce various types of cheddar, mozzarella, Swiss and Muenster cheeses, sold in chunks, slices, shreds and snack bars; they're also committed to becoming a zero-waste operation.

Read More Show Less