Carbon bubble makes Australia's coal industry ripe 'for financial implosion'

[kristopher]

Carbon bubble makes Australia's coal industry ripe 'for financial implosion'
Much of the nation's coal reserves will be worthless if world's governments fulfil pledge to cap emissions, warns report

Damian Carrington
guardian.co.uk, Sunday 28 April

Australia's huge coal industry is a speculative bubble ripe for financial implosion if the world's governments fulfil their agreement to act on climate change, according to a new report. The warning that much of the nation's coal reserves will become worthless as the world hits carbon emission limits comes after banking giant Citi also warned Australian investors that fossil fuel companies could do little to avoid the future loss of value.

Australia is already the globe's biggest coal exporter and "mega-mine" plans in Queensland for more extraction are identified as the world's second biggest "carbon bomb" threatening runaway global warming.

"Investments in Australian coal rest on a speculative bubble of climate denial, indifference or dreaming," said John Connor, one of the new report's authors and CEO of The Climate Institute, an independent research organisation based in Sydney. "Investors, governments and even some coal companies say they take climate change seriously, but this report shows they do not or are taking risky gambles."

James Leaton, at thinktank Carbon Tracker and also another of the report's authors, said: "Investors need to challenge the assumption that coal demand will continue to rise in China and elsewhere, otherwise billions of dollars of taxpayer, superannuation and shareholder funds will be wasted in assets linked to unburnable carbon."

Carbon Tracker's recent global report found that at least two-thirds of existing fossil fuel reserves will have to remain underground ...

http://www.guardian.co.uk/environment/2013/apr/28/carbon-bubble-australia-coal-industry

[pscot]

1. "a speculative bubble of climate denial, indifference or dreaming"

[kristopher]

8. That's what they said.

I take it you agree?

[kestrel91316]

2. Coal mine owners should have hedged their bets and diversified their holdings

into renewables. So should nations have. If they haven't, well, the result won't be pretty. But someone has to accept responsibility for being incredibly blind and stupid.

[NickB79]

3. "if the world's governments fulfil their agreement to act on climate change"

Well then, based on that I'd say Australia is in no danger for decades to come.

[kristopher]

4. I doubt investors whose pensions are at risk will think that way nt

[NickB79]

5. I'm sure they'll take notice when global coal consumption drops

IE, not for many, many years to come.

Like the article said, the Australian coal bubble will pop IF the governments of the world come together in the next few years and actually leave 2/3 of the planet's fossil fuels in the ground. I find that a very slim possibility at this point in time.

[kristopher]

6. I don't think it is as far away as it seems

You've undoubtedly read my comments on us reaching a critical mass where the winners from new technologies gain the upper hand over entrenched technologies that have been able to dominate the economic landscape.

Once that tipping point is reached, change can happen pretty rapidly. The article makes some excellent points that have a direct bearing on that process. Your posting history shows that you will accept nothing as a positive development except the expansion of nuclear generation, so frankly your opinion isn't very valuable to me.

[kristopher]

7. Fossil is expensive; GM wants action on climate change; UK coal company goes bust

Scientist Roy Spencer is wrong: fossil fuels are expensive
Fossil fuel prices are artificially depressed by the trillions of dollars of subsidies they receive every year.

http://www.guardian.co.uk/environment/climate-consensus-97-per-cent/2013/may/01/roy-spencer-wrong-fossil-fuels-expensive

General Motors urges Obama and Congress to unite on climate change
Auto giant adds signature to Climate Declaration, which calls on government to pass climate laws that would help economy

http://www.guardian.co.uk/environment/2013/may/01/gm-obama-congress-climate-change

UK's largest coal producer 'seeks voluntary liquidation'
Up to 2,000 jobs at risk after UK Coal Operations hit by £300m losses and 'disastrous' Daw Mill mine fire

http://www.guardian.co.uk/business/2013/may/01/uk-largest-coal-producer-voluntary-liquidation