• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 8 hours Oil prices going Up? NO!
  • 1 day Could Venezuela become a net oil importer?
  • 2 hours Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 57 mins Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 1 day Gazprom Exports to EU Hit Record
  • 9 hours Could oil demand collapse rapidly? Yup, sure could.
  • 6 hours Oil prices going down
  • 2 days Why is permian oil "locked in" when refineries abound?
  • 1 day Oil Buyers Club
  • 7 hours Saudi Arabia turns to solar
  • 8 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 2 days EVs Could Help Coal Demand
  • 8 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 1 day Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 1 hour Are Electric Vehicles Really Better For The Environment?
  • 1 day EU Leaders Set To Prolong Russia Sanctions Again
Alt Text

Canada’s Oil Crisis Is Far From Over

While the Canadian government has…

Alt Text

3 Possible Outcomes From The OPEC Meeting

With the OPEC meeting nearing,…

Alt Text

Did OPEC Need To Cut Oil Output At All?

Global oil demand continues to…

Charlotte Dudley

Charlotte Dudley

Charlotte is a writer for Environmental Finance.Environmental Finance is the leading global publication covering the ever-increasing impact of environmental issues on the lending, insurance, investment…

More Info

Trending Discussions

World Stock Markets Over-Exposure to Fossil Fuels Putting Investors at Risk

The world’s stock markets are over-exposed to fossil fuels, putting investors at risk of a ‘carbon bubble’, according to a report by research group Carbon Tracker Initiative which calls for an overhaul of the way capital markets value risk.

The report looks at how fossil fuel reserves held by listed companies are assessed by the market and argues that up to 80% of the world’s fossil fuel reserves will be unusable if average global temperatures are to be limited to a 2°C rise, the level at which scientists believe global warming can be stabilised.

Carbon Tracker says there are proven fossil fuel reserves which would emit 2,795 billion tonnes (Gt) of carbon dioxide equivalent (CO2e) if burned. The top 100 listed coal miners and the top 100 listed oil and gas companies have reserves representing 745Gt of CO2e. However, the report says that only 20% of the total reserves can be burned unabated if carbon targets are to be met, “leaving up to 80% of assets technically un-burnable”.

Furthermore, the amount of fossil fuel reserves in companies listed on the world’s capital markets is greater than the recommended 20% limit, Carbon Tracker added.

The report points to recent UK listings by companies such as commodity trader Glencore, Indonesian miner Bumi and the Tony Hayward-led oil and gas company Vallares and says regulators did not consider the “potential systemic risks” to financial markets posed by these and other fossil fuel-intensive companies.

Capital markets have “locked a carbon-intensive future into their operating systems”, by rewarding companies for boosting fossil fuel assets, without regard to limits on consumption, the report argues.

Pension funds risk exposure to ‘stranded assets’

“Pension funds and other asset owners face the risk of being exposed to ‘stranded assets’,” it says.

James Leaton, project director at Carbon Tracker in London and author of the report, said much analysis has focused on past corporate emissions, but it is important to also consider how the market values and assesses the potential for future emissions.

“While people are critical of China for its emissions increasing, or Brazil or India, it’s actually the global capital markets that finance that,” he said.

Regulators should require tougher corporate disclosure of fossil fuel reserves and carbon emissions, and should improve the assessment of financial risk associated with unburnable carbon, he added.

The report was commissioned by Investor Watch and financed by the Rockefeller Brothers Fund, the Growald Family Fund, the Joseph Rowntree Charitable Trust and the Tellus Mater Foundation.

By. Charlotte Dudley

Source: Environmental Finance




Back to homepage

Trending Discussions


Leave a comment
  • Anonymous on July 14 2011 said:
    According to Mr Leaton, the global capital market finances the emissions from China. On one level that is completely stupid. although indirectly an argument could be made. The problem is that the latter argument would turn out to be so abstruse that nobody would be interested in it, nor would I if I were in the argument-making mode.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News