Thursday, October 10, 2013

Divestment from Fossil Fuels is Both Smart and Responsible

Spearheaded by 350.org's Fossil Free campaign, there is growing momentum to divest from fossil fuels. This movement is being driven by the understanding that if we are to have a hope of staying within the 2 degree C. upper threshold limit we must leave the vast majority of fossil fuels in the ground. Carbon Tracker’s latest Unburnable Carbon report indicated that 60-80 percent of fossil fuel reserves need to be left in the ground.

The catastrophic consequences of failing to significantly reduce our dependence on fossil fuels has been widely documented. The science is clear, climate change will cause unprecedented extreme weather like storms, floods and drought. All of which will have exorbitant costs including massive crop failures.

All of these factors coalesce to make investments in fossil fuels high risk, with a significant likelihood that they will one day be valueless. Conversely there are alternatives to fossil fuel investments that have a bright future and offer significant returns. Renewable energy investments both help to reduce our dependence on petrochemicals and they mitigate against climate change.

A growing number of investors are divesting from fossil fuels and investing in clean alternatives. In Europe, the Dutch bank Rabobank recently announced a blanket ban on loans to firms involved with oil sands and fracking for shale gas.

There are safer and more lucrative investments than hydrocarbons. Both smart investors and responsible investors see the writing on the wall, divestment is the only way out as our reliance on burning hydrocarbons is a bubble that is destined to burst.

© 2013, Richard Matthews. All rights reserved.

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