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Bill McKibben figures out why the fossil fuel industry fights so hard to deny global warming. If carbon-based global warming were ever recognized as a problem, their reserves of carbon-based fuels would suffer a precipitous decline in value. McKibben analogizes the situation to the housing bust in which housing prices crashed. Carbon-based energy reserves would crash in a similar fashion. That's why the fossil fuel industry is trying so hard to deny carbon-based global warming.


Why doesn’t [ the fossil fuel industry] fold the way the tobacco industry eventually did? Why doesn’t it invest its riches in things like solar panels and so profit handsomely from the next generation of energy? As it happens, the answer is more interesting than you might think.

Part of it’s simple enough: the giant energy companies are making so much money right now that they can’t stop gorging themselves. ExxonMobil, year after year, pulls in more money than any company in history. Chevron’s not far behind. Everyone in the business is swimming in money.

Still, they could theoretically invest all that cash in new clean technology or research and development for the same. As it happens, though, they’ve got a deeper problem, one that’s become clear only in the last few years. Put briefly: their value is largely based on fossil-fuel reserves that won’t be burned if we ever take global warming seriously.

When I talked about a carbon bubble at the beginning of this essay, this is what I meant. Here are some of the relevant numbers, courtesy of the Capital Institute: we’re already seeing widespread climate disruption, but if we want to avoid utter, civilization-shaking disaster, many scientists have pointed to a two-degree rise in global temperatures as the most we could possibly deal with.

If we spew 565 gigatons more carbon into the atmosphere, we’ll quite possibly go right past that reddest of red lines. But the oil companies, private and state-owned, have current reserves on the books equivalent to 2,795 gigatons -- five times more than we can ever safely burn. It has to stay in the ground.

Put another way, in ecological terms it would be extremely prudent to write off $20 trillion worth of those reserves. In economic terms, of course, it would be a disaster, first and foremost for shareholders and executives of companies like ExxonMobil (and people in places like Venezuela).

If you run an oil company, this sort of write-off is the disastrous future staring you in the face as soon as climate change is taken as seriously as it should be, and that’s far scarier than drought and flood. It’s why you’ll do anything -- including fund an endless campaigns of lies -- to avoid coming to terms with its reality.
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