We have seen that divesting from oil companies is a moral question but it is also a sound economic advice as more and more financial analyst are saying, to the point of ” fossil fuels are the next subprime danger “ as I blogged last year.
Carbon bubble
Fossil fuels are the next subprime danger
Here is further proof it’s high time to divest to avoid the carbon bubble. The Daily Telegraph published this week a most interesting article on how fossil fuels – oil, coal and natural gas – are the next subprime danger of this cycle as
“ The cumulative blitz on energy exploration and production over the past six years has been $5.4 trillion, yet little has come of it. ” There are may reasons for such pessimism on these investment. the author notes among them a few :
Expensive exploration and production with little return ; potential limits to CO2 levels to 450 particles per million ; the increased competitiveness of renewables such as solar and wind…
Divestment reaches large investors
According to the New York Times and Reuters, more than a dozen large foundations representing more than $2 billion (around 1.48 billion euros) in assets will stop investing in fossil fuels, just as the World Bank and the United Nations advise.
To Reuters : ” The Divest-Invest Philanthropy coalition includes foundations, such as the Park Foundation, the John Merck Fund and the Schmidt Family Foundation – co-founded by Google Inc Executive Chairman Eric Schmidt – in the United States “
These foundations believe that the carbon bubble presents both financial and ethical risks and urge others to follow their lead in divesting from unburnable carbon.
Five very important actions to fight climate change
If you are scared – or even simply concerned – by climate change, odds are that you might have weatherized your place, turned to efficient appliances and lightbulbs and perhaps even ditched your car.
While these actions and many others are quite obvious, they might not have the biggest impacts. Kelly Rigg, the Executive Director of the Global Call for Climate Action published a very interesting article on how you could do much much more.
To her, crowdfunding renewables, buying climate bonds (!), divesting from fossil fuels in your pension and mutual funds, voting with your wallet and joining a climate campaign are the next steps.
Investors : beware of the carbon bubble
Fossil fuels are making less and less sense as renewable energies are becoming cheaper and cheaper and as climate change is becoming more and more serious. This is even more the case since we’ll have to leave most of it buried.
The Guardian, the Financial Times and the Economist published compelling articles on a new report that points that this situation could bring another financial crisis as up to six trillions dollars are linked to unburnable carbon.
This strong warning is backed up by banks such as HSBC, Citi, and organisations such as Standard and Poor’s and the International Energy Agency.