Published on : Nov 25, 2015
The energy companies that produce coal, oil, and gas are looking at a possible risk of a US$2.2 tn loss if they continue to invest in energy projects that have no demand in the near future. The demand for non-renewables could be reduced drastically is the world succeeds in achieving the U.N. target of controlling the global temperature rise to lower than 2 degrees Celsius, according to a non-profit organization.
Carbon Tracker Initiative released a report on Wednesday, which stated that oil demand will have peaked by 2020 and there will be no need for new coal mines. Simultaneously, the growth in the gas sector will be abysmal, according to the report. The United States is currently housing the largest exposure to non-renewable projects, with multiple projects lined up till 2025 that add up to US$412 bn. Canada comes second with US$220 bn. Meanwhile, China, Russia, and Australia are all recorded at US$179 bn, US$147 bn, and US$103 bn respectively.
The report’s co-author James Leaton said that there are far too few organizations that admit the fact that they need to cut back on their supply of carbon-intensive products and avoid crossing the threshold set by an internationally recognized carbon budget.
Leaton also added that the climate policies regarding clean technologies will cut down the demand for fossil fuels. There can be a possible devaluation of shareholder value should these market trends be neglected.
Policy makers of Europe will meet in Paris in December 2015 to discuss the new greenhouse gas emission goals.