Saudi Arabia Simply Sees the Carbon Bubble for What it is

[bemildred]

---

What is the Carbon Bubble?

The carbon bubble refers to the overvaluation of fossil fuel companies and petrostate treasuries given the need to rapidly reduce C02 emissions if catastrophic climate change is to be averted. “Catastrophic” is the technical term for predicted climate change if global warming cannot be limited to at least 2 degrees above its present level.

The International Energy Agency estimates that 60 per cent of known fossil fuels need to stay in the ground to avoid breaching that limit (even more if the 1.5-degree target codified in Paris is used). The earth’s carbon budget (or what can safely be burned) is much smaller than the fossil fuel reserves that are available for extraction and combustion.

According to the Carbon Tracker Initiative we have five times more reserves than can be burned.

However, these unburnable reserves are already factored into company share prices and budget projections for petrostates like Saudi Arabia. When policy making catches up with ecological necessity and scientific advice, these reserves will become financially worthless and the carbon bubble will burst.

http://www.desmog.ca/2016/03/01/saudi-arabia-simply-sees-carbon-bubble-what-it

[leveymg]

1. Funny how every time oil reaches its natural floor price another war breaks out

Perhaps there is an algorithm of petropricing to predict mass casualty terrorist attacks?

[bemildred]

2. Probably could come up with a good rule of thumb for it anyway.

It is certainly true that we have been fighting over oil since we dicovered you could burn it to do work, and generally with the idea of getting a monopoly on the market for it. We do love us some monopolies, us "capitalists". We are not really happy unless we can "corner the market" on something and "make a killing" (or better yet get the government to give you the monopoly, so efficient that way).