The Dangers of Stranded Assets and Carbon Bubbles

The HSBC Bank released advice to investors in April, titled Stranded Assets, What Next?.   The letter admits that coal and fossil fuel investments are highly likely to become stranded, and advises that there are “reputational as well as economic risks to staying invested”. A blog by the Pembina Institute  summarizes the HSBC report and considers the dangers of stranded assets for Alberta.

At the international level, G-20 leaders have asked the Financial Stability Board in Basel to convene a public-private inquiry into the dangers to the financial sector as climate rules become much stricter, and fossil fuel assets become stranded. All member countries have agreed to co-operate or carry out internal probes, including the United States, China, India, Russia, Australia, and Saudi Arabia. The investigation will be modeled on that commissioned by Mark Carney at the Bank of England, which is set to report in July 2015. See “G20: fossil fuel fears could hammer global financial system”   in The Telegraph (April 29).

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