‘enormous’ stranded assets show the need to decarbonize
‘It’s about energy in the right place at the right time’
The likelihood of fossil fuel assets being rendered worthless underscores the need to decarbonize the world’s economy as quickly as possible, according to Mark Carney, the U.N.’s special envoy on climate action and finance. His comments come in the runup to COP26, one of the most important climate summits ever held. The U.K. will host U.N.-brokered talks in Glasgow, Scotland from Oct. 31 through to Nov. 12.
Speaking to CNBC’s Steve Sedgwick for the Sustainable Future Forum, Carney, the former governor of the Bank of England, said it was essential to “retool the plumbing” of financial markets so that every financial decision can take climate change into account. This includes steering lending away from fossil fuels and toward renewable energy alternatives. “We need to mainstream this transition to net zero if we are going to get to where the world needs,” Carney said in an interview aired on Thursday.
As part of this effort to reach net-zero carbon emissions by 2050, Carney referenced the U.N.’s Glasgow Financial Alliance for Net Zero, or GFANZ, that is seeking to accelerate the transition to a low-carbon economy. Chaired by Carney, this global coalition of leading financial institutions is responsible for assets of more than $90 trillion…
“We have a combination of things in the world right now and we see it playing out in the U.K. and playing out in Europe most acutely,” he continued. “We have both too many hydrocarbons, enormous stranded assets, whether it’s in coal, three-quarters of coal, half of gas, roughly the same of oil, we have too many fossil fuels. And we don’t necessarily have enough of fossil fuels in the right place.”
“That all screams transition, being transparent about transition, supporting those generation mechanisms that will help get us to ramp up and allow us to ramp up net zero power as quickly as possible.”
Carney, as governor of the Bank of England, first warned about the “potentially huge” risk to investors from stranded assets in 2015, saying vast reserves of coal, oil and gas could become “literally unburnable.“
Mark Carney, chairs a coalition of financial institutions with assets of $90 Trillion.