Bank of England Governor: fossil fuels “unburnable”
Bank of England governor Mark Carney warns that the vast majority of oil reserves should be considered “unburnable. He called for climate change risk to be mainstreamed, because continued fossil fuel investment poses a serious financial risk in a carbon-constrained world, he told an audience at the World Bank. The TUC’s tenth annual climate change conference on 6 November will set out the vital importance of taking international and national action to address climate change.
Can we ever build a green economy?
Looking ahead to the UN’s conference in Paris, December 2015, the TUC’s climate conference on 6 November will ask what more needs to be done to shift the UK towards a lower carbon economy? How can we achieve the substantial shifts we need in power generation, business finance and energy efficiency to give our climate change objectives any chance of being met?
The TUC will publish 3 new reports on the day: on eco-innovation by the UCL Green Economy team; on Just transition, by Greenpeace; and on Paris 2015, by Fergus Green, Policy Analyst and advisor to Lord Stern, Grantham Research Institute on Climate Change
Chaired by Sue Ferns, Director of Research & Communications at Prospect and TUC General Council lead on climate change and the environment, the event’s keynote speakers include:
•Sir David King, Special Representative for Climate Change, Foreign and Commonwealth Office
•Frances O’Grady, TUC General Secretary
•Rt Hon Caroline Flint MP Shadow Secretary of State for Energy and Climate Change
•Professor Paul Ekins, Director, Professor of Resources and Environmental Policy, UCL Institute for Sustainable Resources
Carney has re-emphasised his support for the idea that oil companies’ reserves could be stranded assets – still valued by investors, but ultimately going to embody losses. “The vast majority of reserves are unburnable,” the Bank of England governor said, if the world is to avoid catastrophic climate change.
Thinking of hydrocarbon deposits as stranded assets has gained new prominence, helped by movements like the US student drive to persuade university endowments to disinvest from fossil fuel companies. Glasgow University is the first in the UK to agree to divest out of the fossil fuel industry .
Carney referred to a “tragedy of horizons” – the market failure by which investors, companies and governments are not looking far enough ahead to coming problems like the environment, even though these are known to them.
His call was echoed by leaders of two of the world’s largest economic institutions last week that tackling climate change requires no trade-offs between raising revenue and promoting growth. Christine Lagarde of the International Monetary Fund and Jim Yong Kim of the World Bank reiterated two priorities for their own institutions:
- to remove the fossil fuel subsidies that incentivize the use of fossil fuels at dangerous levels; and
- to put a price on carbon.
The leaders said this approach will lead to economic benefits, while insulating the global economy from risks caused by a planet that warms beyond two degrees.