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Fossil Fuel Divestment / Carbon Bubble Discussion

Discussion in 'Energy, Environment, and Policy' started by tigerade, Apr 3, 2014.

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What is your stance on fossil fuel divestment?

  1. I support fossil fuel divestment and have divested myself.

    13 vote(s)
    59.1%
  2. I support fossil fuel divestment but have not divested.

    6 vote(s)
    27.3%
  3. I am unsure, neutral, waiting on more information.

    0 vote(s)
    0.0%
  4. I do not support fossil fuel divestment but don't own fossil fuel stocks.

    1 vote(s)
    4.5%
  5. I don't support divestment and own fossil fuel stocks.

    2 vote(s)
    9.1%
  1. tigerade

    tigerade Member

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    This a thread for discussion on dealing with the carbon bubble, and addressing the question of Fossil Fuel divestment.

    First, a very brief discussion of what the carbon bubble is. My personal definition is that the carbon bubble is the enormous amount of money invested in future fossil fuel exploration and extraction, with the expectation that those reserves will be consumed. This of course assumes that the status quo remains in place, and that governments do nothing to curb fossil fuel use, that the market doesn't shift toward clean energy technologies, and that carbon capture and storage does not come to realization. The current fossil fuel reserves amount to about three times higher than the amount of carbon that can be warmed to keep the world below 2C of warming.

    So that presents a few possible outcomes: 1. Status quo, fossil fuel investment stays in place, gov'ts do nothing, world burns exponentially more carbon. 2. The world acts on climate change and restricts fossil fuel use, the carbon bubble bursts dramatically, millions of investors lose their shirts, possible severe economic recession ensues. 3. There is a more gradual, steady divestment in fossil fuels, investors get out of unburnable carbon, the carbon bubble is deflated and becomes smaller in size, the carbon bubble bursts and has a less consequential impact than option 2.

    I really don't know what will happen, but I have gone ahead and personally divested from fossil fuels. Not only because I see serious future risk in these stocks, but also because I agree that if it's wrong to ruin the climate, it's wrong to profit off it as well. I cannot try to make money on something that I don't personally agree with. If I learned a company I had stock in was doing something abhorrent, I would act accordingly and sell the stock. I try to invest in companies that not only can get a profit but also make the world a better place. I suppose that fits me in the category of activist investor. Anyway, I would really love to hear your thoughts on the carbon bubble and fossil fuel divestment. Please also vote in the poll, if you would.

    Here are some links you may find helpful:

    This is a very nice widget showing you the placement of fossil fuel investments:

    Carbon Bubble Interactive | Carbon Tracker Initiative

    Here is an article from the Economist that sums it up. Either governments won't do anything about climate change, or fossil fuel companies are overvalued.

    Energy firms and climate change: Unburnable fuel | The Economist

    A Motley Fool article bringing up that Energy investors should keep the carbon bubble on your mind:

    http://www.fool.ca/2014/04/02/warning-1-risk-energy-investors-should-worry-about/?utm_source=rss&utm_medium=rss&utm_campaign=warning-1-risk-energy-investors-should-worry-about

    From a Bloomberg article:
    Bloomberg LP Launches First Tool That Measures Risk of Assets | InsideClimate News

    From a Guardian article:
    'Unburnable' carbon fuels investment concerns | Guardian Sustainable Business | Guardian Professional




    Seven_Reasons_Sell_Coal_Oil_Gas_Stocks.jpg
     
  2. nwdiver

    nwdiver Active Member

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    I support divestment in-so-far as people don't confuse it with an actual solution... Exxon stock could be worth $0 but as long as people keep buying oil they will continue to drill for it. A boycott on their products is far more effective than a boycott on their stock. There may be some fringe benefits to divestment since capital may be a little more difficult to raise but most of these companies have $Billions in cash reserves so they probably don't need a loan.
     
  3. ggies07

    ggies07 Active Member

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    I totally support this and think it's making a great impact. 350.org started the divestment campaign to grab the oil industry's attention because nothing was being done about getting off of fossil fuel. Check out the site, 350.org
     
  4. Robert.Boston

    Robert.Boston Model S VIN P01536

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    Skeptics about the power of divestment should read the history of divestment in companies doing business in South Africa.

    The real argument for divesting is about your​ return on equity. If you believe that Tesla is going to revolutionize the world of personal transportation, then it also follows that the big oil companies are in for a world of hurt.
     
  5. nwdiver

    nwdiver Active Member

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    #5 nwdiver, Apr 4, 2014
    Last edited: Apr 4, 2014
    Ok... now I'm a little confused... is the primary purpose here to protect your capital by not investing in a doomed company like Exxon or is it to get Exxon to stop drilling for oil by devaluing the company... I agree with the first; not so much the second. Only one thing can reduce the amount of oil Exxon drills and that's how much is bought and burned.

    Comparing fossil fuel divestment to South Africa and apartheid is a little disengenuous for many reasons... not the least of which being the fact that South Africa didn't have a business model that defined apartheid as their sole reason for their existence.
     
  6. RichardC

    RichardC Cdn Sig & Solar Supporter

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    #6 RichardC, Apr 4, 2014
    Last edited: Apr 5, 2014
    I think the concept of a social license may help to bridge this gap. The fossil fuel business model relies implicitly on a social license to dump unlimited amounts of carbon pollution into the environment without the costs or consequences being borne by the polluters. Divestment can contribute to the public and corporate recognition that the social license granted in the past can and should be brought to an end (through, for example, a revenue neutral pollution levy). See: http://www.teslamotorsclub.com/showthread.php/28339-Carbon-Tax/page5?p=607172#post607172
     
  7. Raffy.Roma

    Raffy.Roma Active Member

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    I have seen that TMC is advertizing fossil fuels trading. Isn't this against the spirit of TMC?
     
  8. tigerade

    tigerade Member

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    Norway is considering divesting from fossil fuels:
    Oil-rich Norway may divest from fossil fuels

     
  9. RichardC

    RichardC Cdn Sig & Solar Supporter

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    Carbon Bubble and Divestment Around the World

    A Committee of the UK Parliament has been investigating the carbon bubble and has held hearings addressing, among other issues the risks associated with the valuation of fossil fuel assets which will have to be left unburned. As noted in the summary of that report:

    See: http://www.publications.parliament.uk/pa/cm201314/cmselect/cmenvaud/191/19103.htm
    http://blueandgreentomorrow.com/2014/03/06/mps-issue-stark-carbon-bubble-warning-to-investors-and-finance-world/

    Members of the European Parliament have also investigated the carbon exposure of the top 43 European banks and pension funds.They found out that in order to limit the risks posed by the ‘carbon bubble’ that countries should quickly shift towards a clean, low-carbon economy. The report also found that UK pension funds are among the financial institutions at greatest risk.

    Reinhard Bütikofer, spokesperson for the Greens-EFA in the European parliament, said:

    See: http://reinhardbuetikofer.eu/wp-content/uploads/2014/03/GND-Carbon-Bubble-web1.pdf
    http://blueandgreentomorrow.com/2014/03/08/carbon-bubble-risk-reinforces-the-case-for-fossil-fuel-divestment/

    On the other side of the planet, the Australia Institute has prepared a report called Climate proofing your investments: Moving funds out of fossil fuels, which examines the risks of investing in fossil fuel companies.

    See: https://s3.amazonaws.com/s3.350.org/images/Climate_Proofing_Your_Investments_final.pdf
    http://blueandgreentomorrow.com/2014/03/08/carbon-bubble-risk-reinforces-the-case-for-fossil-fuel-divestment/
     
  10. ggies07

    ggies07 Active Member

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  11. tigerade

    tigerade Member

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    WSJ journal article address the risk in the carbon bubble:

    A Warning For Oil Investors: Is Carbon Riskier Than You Think? - Corporate Intelligence - WSJ

     
  12. ggies07

    ggies07 Active Member

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    Another great piece by Bill McKibben: Bill McKibben: Being carbon-foolish cost CalPERS and CalSTRS $5 billion - LA Times

    And this is why I believe in the divestment campaign.

     
  13. ggies07

    ggies07 Active Member

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    #13 ggies07, Sep 3, 2015
    Last edited by a moderator: Mar 13, 2016
    Great video of Bill explaining the Divestment campaign.

     
  14. DriverOne

    DriverOne Member

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    Slide 7. We've burned 321, can burn 565 more? (Sorry, I can't read the units).

    We burned 321 over 150 years, but are burning faster than at the start. Widely guessing, we have another century of burning to get through the 565, and still stay within "safe" limits? That can't be right, can it? I'm surprised the amount we can still safely burn is so high.

    (Really of course, we should burn zero more, not 565 - and to politicians the 565 looks like a goal to reach.)
     

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