Save the planet: invest in fossil fuels?
To stabilise the climate, net global carbon dioxide emissions must be reduced to zero. Yet fossil carbon has never been cheaper: the market capitalisation of Peabody Energy values its coal reserves (30 years’ production at current rates) at less than 3 cents per tonne of buried carbon. Either the market is assuming the vast bulk of those reserves will never be used at all, or (more likely) the market isn’t thinking about the next 30 years. The fossil fuel industry is likely to emerge from its current crisis largely under new ownership. Will the new owners be even more opaque and defensive on environmental issues than the old, or does this represent an opportunity for environmentally conscious investors to ensure the industry in future plays a constructive role in the transition to a net zero carbon economy?
This lecture will present some of the work of the Oxford Martin Net Zero Carbon Investment Initiative, which is exploring the role investors can play in enabling the transition to a stable climate while minimising the risks associated with asset stranding or locking in emissions that exceed a safe cumulative total. Professor Myles Allen will argue that stabilising global temperatures depends on the development of “backstop” technologies to allow fossil carbon to be used without net dumping of CO2 into the atmosphere, and that until the fossil fuel industry itself takes on this challenge, we cannot hope to solve the problem.