Carbon bubble

Abstract: This paper tracks the development of climate justice discourse around leaving fossil fuels in the ground. It then looks forward to the questions of equity that calls for the decline of fossil fuel production raise. It argues, following the Lofoten Declaration for a Managed Decline of Fossil Fuel Production around the World, that global distributive justice requires rich countries, who have benefited the most from fossil fuel extraction, and who have most alternative available development pathways must lead in leaving fossil fuels in the ground. However, the paper shows that equitably managing the end of the fossil fuel era is complicated by how economic efficiency or the interests of frontline communities might at times diverge from global distributive justice. In response, the paper argues that a useful short-term strategy is to focus on how equity and economic efficiency both suggest that wealthy historically polluting countries should leave high-cost, carbon-intensive fossil fuels in the ground. Beyond that, the paper highlights how difficult questions and trade-offs emerge at points where considerations of equity and economic efficiency diverge. Such points of divergence represent a considerable challenge for advocates of an equitable decline of fossil fuel production, and are areas of significant interest for future research and advocacy.

Abstract: While the Green New Deal has become a lightning rod in the political sphere, there is a parallel movement emerging within the business community that will shake the very foundation of the global economy in coming years. The key sectors that make up the infrastructure of the economy are fast-decoupling from fossil fuels in favor of solar and wind energies that are becoming ever-cheaper. New studies are sounding the alarm about the prospect of 100 trillion dollars in stranded assets that are creating a carbon bubble likely to burst by 2028 - causing the collapse of the fossil fuel civilisation. The marketplace is speaking and governments will need to respond if they are to survive and prosper. In The Green New Deal, New York Times bestselling author and renowned economic theorist Jeremy Rifkin delivers the political narrative and economic plan for the Green New Deal that we need at this critical moment in history. The concurrence of a stranded fossil fuel assets bubble and a green political vision opens up the possibility of a massive shift to a post-carbon ecological era, in time to prevent a temperature rise that will tip us over the edge into runaway climate change. With twenty-five years of experience implementing Green New Deal-style transitions for both the European Union and the People's Republic of China, Rifkin offers his vision for how to transform the global economy and save life on Earth.

Abstract: Climate change policies that rapidly curtail fossil fuel consumption will lead to structural adjustments in the business operations of the energy industry. Due to an uncertain global climate and energy policy framework, it is difficult to determine the magnitude of fossil energy reserves that could remain unused. This ambiguity has the potential to create losses for investors holding securities associated with any aspects of the fossil fuel industry. Carbon bubble risk is understood as financial exposure to fossil fuel companies that would experience impairments from assets stranded by policy, economics or innovation. A grassroots divestment campaign is pressuring institutions sell their fossil fuel company holdings. By September 2014, investors had responded by pledging to divest US $50 billion of portfolios. Though divestment campaigns are primarily focused on a moral and political rationale, they also regularly frame divesting as a strategy for mitigating stranded asset risk. We review aspects of the divestment movement alongside the context of carbon bubble risk. Several common hypotheses on reducing stranded carbon asset exposure through divestment are critically examined. We find that institutional investors are limited in their ability to reduce exposure to carbon through divesting and that the financial sector is likely to absorb many i®fossil freei¯ funds.