Carbon to take economy’s breath away by 2015
Australian news service, Crikey has a story today Carbon to take economy’s breath away by 2015 which makes a very interesting point:
The Potsdam Institute research says that, if we are to have a reasonable chance of containing global warming to within 2 degrees, we only have a “budget” of 890 billion tonnes of CO2 emissions. This is a fixed budget, because carbon stays in the atmosphere for hundreds of years. So what is important is how much we emit?—?not when we emit it. If we continue to burn fossil fuels in line with our current business-as-usual approach, then we use up our budgeted emissions by 2024!
To add insult to injury, the quantum of fossil fuels required to emit 890 billion tonnes of CO2 is equivalent to only 25% of proven, economically recoverable reserves. This means that, in theory, 75% of known proven and probable reserves have no economic value.
This has startling implications for investors because there will either be (a) some form of global action that will seek to limit warming to 2 degrees; or (b) no effective action, with the consequence being runaway climate change. These are the only two options we have. The first one severely devalues our fossil fuel reserves as we scramble to reconfigure global energy networks; and the second one, while possibly maintaining the market value of those reserves for longer, is like driving off the edge of a cliff.
There will be a cost associated with carbon emissions, that’s inevitable. There will be investments into emissions reduction programmes on as massive scale, funded via carbon credits. This is what they mean by “a price on carbon”, and its implications are littered with unknown unknowns. One great way for you to get your head around what the impacts might be is to work out how much your liabilities might be, that is, what your firm’s carbon footprint is.
If you are an Australian small business then check out G3MS Lite, Carbon Planet’s amazing greenhouse gas accounting system for small business. It’s only $99. — DS