- August 20, 2022
- Posted by: Stratford Team
- Category: Economy
A 2021 study in the journal Nature found that in order to avert the worst impacts of climate change, most of the world’s known fossil fuel reserves must remain untapped. According to the study, 90 percent of coal and nearly 60 percent of oil and natural gas must be kept in the ground in order to maintain a 50 percent chance that global warming will not exceed 1.5 degrees Celsius above preindustrial levels.
As the world transitions away from greenhouse-gas-emitting activities to keep global warming well below 2 C (and ideally 1.5 C) in alignment with the Paris Agreement on climate change, fossil fuel companies and their investors face growing financial risks (known as transition risks), including the prospect of ending up with massive stranded assets. This ongoing transition is likely to significantly scale back fossil fuel extraction and coal-fired power plant operations, exacting steep costs — most notably asset value…
