[MCN] Sorry, coal: the party's over
lance at wildrockies.org
Tue Apr 18 14:11:16 EDT 2017
Climate change and risk to fossil fuel industry: Sustainability train has left the station
CAMBRIDGE UNIVERSITY PRESS - <https://www.eurekalert.org/pub_releases/2017-04/cup-cca041817.php>Climate change and risk to fossil fuel industry: Sustainability train has left the station <https://www.eurekalert.org/pub_releases/2017-04/cup-cca041817.php>CAMBRIDGE UNIVERSITY PRESS - Public Release: 18-Apr-2017 <https://www.eurekalert.org/pub_releases/2017-04/cup-cca041817.php>
Two seminal articles by energy experts in the latest issue of MRS Energy and Sustainability (MRS E&S) examine the climate-related risks facing the fossil fuel industry and conclude that the sustainability train has already well and truly left the station -- and is not coming back.
MRS Energy and Sustainability
This article compiles and categorizes the various forms of climate risk facing the fossil fuel industry. The type and intensity of risk differs greatly among the three forms of fossil fuels, as well as between countries in the developing and developed world. The paper finds heightened risk for the coal industry and reduced risk for oil businesses, due to its lack of substitutes.
Burning coal, oil, and natural gas is the source of two-thirds of the world’s emissions of greenhouse gases. Sales of these fuels also represent the economic underpinning of resource-rich countries and the world’s largest firms. As such, steps taken to abate emissions undermine commercial opportunities to monetize fossil fuel reserves. Risks to the industry correlate with progress on climate goals.
This article analyzes recent literature on climate action strategy and finds that a new or intensified set of risks has arisen for the fossil fuel industry. These include government policies and legislation, financial restrictions among lenders and insurers, hostile legal and shareholder actions, changes in demand and geopolitics, as well as the onset of new competitive forces among states and technologies.
The exposure of carbon-based businesses to these risks and the potential for loss is neither distributed uniformly across the sector, nor adheres to a uniform time scale. Shareholder-owned firms in the developed world will be incentivized to react sooner than large state-owned resource owners in developing countries. The fates of the three fossil fuels also appear likely to play out differently. Demand for oil appears insulated by its lack of viable substitutes, while coal businesses are already undergoing climate-related action, pushed by decreasing social acceptance and constraining financial regulation. At the other end of the spectrum, climate action has improved the medium-term viability of low-carbon natural gas. What appears clear is that, as effects of climate change grow more pronounced, the industry faces a future that is less accepting of current practices.
“Finally, we are committed to a high level of consumption because, whether we need the goods or not, we very much need the employment their production provides …. We are chained to a high level of production and consumption not by the pressure of want but by the urgencies of economic security.”
John K. Galbraith.
“How much should a country consume?”
In Jarrett, Henry (editor), Perspectives on Conservation. John Hopkins Press. 1958
“In an attempt to clarify the issues, first let us advance the following proposition: The more wasteful a society the greater the employment opportunities.”
Kimon Valaskakis, Peter S. Sindell, J. Graham Smith, and Iris Fitzpatrick-Martin. The Conserver Society. 1970. Harper & Row.
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