Experts say only policy action can burst the carbon bubble

Mark Campanale, founder and executive chairman at Carbon Tracker, said we are in a ‘carbon bubble’, which means the global economy is headed for disaster unless companies align their business models with climate goals.

In a panel on stranded assets at our sister publication Business Green’s Net Zero Festival, he spoke about the positive strides he has seen in leading that bubble to burst.  

The idea of the ‘carbon bubble’ means when it burst, investments amounting to trillions of dollars in fossil fuels – coal mines, oil wells, power stations, conventional vehicles – will lose their value when the world moves decisively to a low-carbon economy.

He said the success of Engine No.1, the small hedge fund that managed to place three climate-focused independent directors on oil giant ExxonMobil’s board, is significant.

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Campanale is optimistic that if this type of activity continues the fossil fuel industry will start to feel the economic pressure.  

However, he and his fellow panellists stressed there needs to be government intervention to drive the real change.

“You have to hope that there will be a [carbon] bubble that bursts,” said Katherine Dixon, chief counsellor of the International Energy Agency.

She noted that only globally accepted policy changes will really turn the dial.

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Looking ahead to COP26, a key opportunity to create such political change, the speakers were sceptical if the needed action will be taken.

Tracey Cameron, senior manager of corporate climate engagement at Ceres, said the “jury is still out” when it comes to how effective COP26 will be in terms of collective policy change.

Campanale noted that the Paris Agreement does not even mention fossil fuels and he is campaigning for a Fossil Fuel Non-Proliferation treaty to manage a global phase out of coal, oil and gas.

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