Claim: fossil fuel divestment will increase CO2 emissions, not lower them

Posted: November 27, 2019 by oldbrew in climate, Emissions, Energy, opinion
Tags: , , , ,


So what, you may say. But it shows up some of the woolly thinking of so-called climate activists. Lacking viable alternatives, the major role of fossil fuels in the global economy is bound to continue so suppliers will have their market. Believing that trace gases can somehow disturb the climate in a negative way isn’t going to change that.

A global campaign encouraging individuals, organizations and institutional investors to sell off investments in fossil fuel companies is gathering pace. According to 350.org, US$11 trillion has already been divested worldwide.

But, while it may seem a logical strategy, divestment will not lower demand for fossil fuels, which is the key to reducing greenhouse gas emissions.

In fact, it may even cause emissions to rise, argues The Conversation @ Phys.org.

At first sight, the argument for divestment seems straightforward. Fossil fuel companies are the main contributors to the majority of CO₂ emissions causing global warming.

Twenty fossil fuel companies alone have contributed 35% of all energy-related carbon dioxide and methane emissions since 1965.

The argument goes that squeezing the flow of investment into fossil fuel companies will either bring their demise, or force them to drastically transform their business models.

It makes sense for investors, too, as they avoid the risk of holding “stranded assets”—fossil fuel reserves that will become worthless as they can no longer be exploited.

For companies heavily invested in coal—the most polluting fossil fuel—this rings true. Although new coal plants are still being constructed in countries such as China, India and Indonesia, predictions by major energy agencies and industry alike indicate a steep decline in its contribution to the global energy supply.

With cleaner alternatives readily available, coal is no longer considered a safe long-term investment—and widespread divestment will only add to this sentiment.

When it comes to oil and natural gas, however, the picture looks quite different. Oil is used for a much wider range of products and processes than is coal, while the cleaner reputation of natural gas gives it significant appeal as a “bridge fuel” to a zero carbon economy, whether rightly or not.

As a result, the push for oil and gas divestment is likely to have unintended consequences.

Continued here.

Comments
  1. Chaeremon says:

    Pension funds and asset funds which sell without market demand destroy their clients’ assets.

  2. Phoenix44 says:

    The whole idea is nonsense. You can’t “divest” without a buyer.

    So somebody else gets an asset at a lower value than otherwise. The seller loses, the buyer gains, the company carries on.

    The whole idea is not “woolly” but deluded.

  3. Gamecock says:

    Correct, Phoenix.

    The stupid burns.

  4. Gamecock says:

    And note that journalism is absent from the playing field, not explaining to the ignoramuses that they look stoopid. Proof the press is agenda driven, not interested in actually getting the truth to the people.

  5. […] über Claim: fossil fuel divestment will increase CO2 emissions, not lower them — Tallbloke’s Talk… […]

  6. JB says:

    “Knowledge is Power. Time is Money. Power equals Work divided by Time. Therefore Money equals Work divided by Knowledge. Thus Money approaches infinity as Knowledge approaches zero.” Poirier’s Theorem

    “Sure must be a great consolation to the poor people who lost their stock in the late crash to know that it has fallen in the hands of Mr. Rockefeller, who will take care of it and see it has a good home and never be allowed to wander around unprotected again. There is one rule that works in every calamity. Be it pestilence, war, or famine, the rich get richer and poor get poorer. The poor even help arrange it.”–Will Rogers

    “I don’t want a nation of thinkers. I want a nation of workers.”–John D. Rockefeller

    “A fool will search for fire with a lit candle.”–Chinese Proverb

  7. It doesn't add up... says:

    Moreover, if Western banks and pension funds refuse to finance the industry, you can be sure the Chinese and Russians will be more than willing to do so, giving them considerable leverage over our future. We already have the Chinese invested in a refinery in Scotland and several North Sea projects. This article dates from 2016:

    https://www.dailymail.co.uk/news/article-3754249/China-BIGGEST-crude-oil-operator-North-Sea-amid-concerns-growing-influence-Britain.html

    Retreat from these assets is selling our future for a mess of potage (well, some more Chinese tat that we import).

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