Gamble on carbon and the climate could trigger a new financial crisis

[kristopher]

This gamble on carbon and the climate could trigger a new financial crisis
There is little evidence that institutional investors have recognised that they are sitting on a carbon-asset timebomb

Kevin Watkins
theguardian.com, Friday 2 August 2013 12.35 EDT

If you want to see market irrationality in action, look no further than current stock market valuations for the world's major oil, gas and coal companies.

At a time when governments are supposedly preparing for a global climate change deal that will cut carbon emissions, energy multinationals are investing in carbon assets like there's no tomorrow.

Put bluntly, either we're heading for a climate catastrophe, or the carbon asset bubble will go the way of sub-prime mortgage stock.

Yesterday's disappointing second-quarter results for Royal Dutch Shell provided a useful guide to the future. Over the past couple of years the company has invested heavily in exploration. It has pumped billions of pounds into fracking for natural gas in Ukraine and Turkey; the development of tar sands in Canada, and drilling in the Arctic. The market verdict, prompted by a dip in prices, reduced profits, and concern over costs: a drop in share prices.

You can't help wondering what will happen when carbon prices are aligned with climate imperatives. ...

http://www.theguardian.com/business/2013/aug/02/carbon-tax-investment-market-timebomb


Yet another thread in the fabric of resistance to dealing with carbon.

[Mnemosyne]

1. They are gambling with our lives and we are losing. nt

[NoOneMan]

2. Ah, let it.

Hell, gambling with the financial system triggers financial crises often enough

[GliderGuider]

3. I've said for years that only economic disasters reduce CO2 emissions in the short term.

It would be deliciously ironic if a fossil-fuel market bubble caused it.