By Cameron Love
Current atmospheric CO2 concentration is almost at 400 parts per million, we’re burning fossil fuels at a rate which is emitting a further 30 gigatons a year and it’s increasing at 3 per cent annually. The Carbon Tracker Initiative reports there’s a further 2,795 gigatons of carbon dioxide emissions in reserves representing ‘value’ to shareholders in oil, gas and coal companies. The latest climate science tells us that burning just one fifth of these reserves will release another 565 gigatons of emitted CO2 and take us to 2 degrees of global warming. Yet the fossil fuel industry’s business model includes exceeding this limit five fold.
Exactly what value should we place on these companies reporting vast fossil fuel ‘riches’ when 80 per cent of their stored wealth cannot responsibly be redeemed? Although still technically underground, these reserves are on balance sheets, with companies borrowing against them and they are reflected in share prices. Why would we continue to support their increasingly expensive exploration for commodities which will become an economic liability within 15 years, if burning these fossil fuels continues at current rates and atmospheric concentration of CO2 maintains its current trajectory? Notwithstanding the rogue status these companies now have from an environmental perspective, how much longer do investors really wish to gamble on their wealth before the very assets these companies own are left stranded, with no economic value? With a potential calculated US$20 trillion write-off pending, it should only attract investors with a significant appetite for risk.
If this cautionary news is not heeded and we burn the carbon anyway, investors may enjoy a short-term benefit, but the longer-term financial impact of rising temperatures severely undermines the security of production, insurance and lifestyle. Economics aside, only the morally corrupt would continue to seek to make a profit from activities so reckless as to risk our very civilisation.
Last Friday night BCCAN screened Bill McKibben’s succinct Do the Math film an excerpt of which can be seen at [www.youtube.com/watch?v=IsIfokifwSo]. The film explains the rationale behind divesting our investment portfolios of fossil fuel companies unless they alter their destructive course and use their extensive but increasingly tenuous wealth to research and develop alternative energies. Readers are encouraged to examine their superannuation and other investments to ascertain what level of risk currently exists for them and discuss options with their financial advisers.
Cameron Love is a member of Bathurst Community Climate Action Network