The Canadian Centre for Policy Alternatives published a new report today titled Canada’s Carbon Liabilities: The Implications of Stranded Fossil Fuel Assets for Financial Markets and Pension Funds by Marc Lee and Brock Ellis.
It points out that we’re awfully close to reaching our global carbon budget, the maximum amount of carbon dioxide which can be emitted before we reach a two degree Celsius increase in global temperatures — an increase which would mean runaway climate change. That budget leaves us with 500 billion tonnes (Gt) of carbon dioxide (though that still only gives us an 80 per cent change of staying under the limit) to emit. That leaves Canada with a budget of about 9 Gt. Now, the problem is that the fossil fuels we have in reserve would put as far beyond that budget.
The authors make a few suggestions. They say we should establish a national carbon budget which would “manage its fossil fuel resources for wind-down,” forcing the federal government to “acknowledge that a large share of proven and potential reserves is indeed ‘unburnable carbon’. These reserves should be effectively taken out of circulation, leaving only Canada’s fair share of the remaining global carbon budget.” We should “make sure the costs of greenhouse gas emissions are reflected in market prices”; develop green bonds, “borrowing against future carbon tax revenues”; and have the “government of Canada … direct the Canada Pension Plan Investment Board to divest from fossil fuel companies.” These are only a few of their many feasible policy recommendations.
To not make these changes now will be to commit us to a major financial bubble. “[P]ension funds and other institutional investors are beginning to question whether owning fossil fuel stocks is a wise financial move in light of climate change,” the authors point out.
We’re so glad you stopped by!
Thanks for consuming rabble content this year.
rabble.ca is 100% reader and donor funded, so as an avid reader of our content, we hope you will consider gifting rabble with a donation today!
Whether it be a one-time donation or a small monthly contribution, your support is critical to keep rabble writers producing the work you’ve come to rely on as a part of a healthy media diet.