“Global Warming’s Terrifying New Math” — Bill McKibben’s Call to Action on Carbon Emissions Makes Waves
Continued from previous page
In other words, we’re running out of “atmospheric space.” And, yes, we’re sure.
The Third Number: 2,795 Gigatons
This larger number is the point of the story. To see this, note that it’s five times as large as the 565-gigaton carbon budget we met just above.
This number is the scariest of all – one that, for the first time, meshes the political and scientific dimensions of our dilemma. It was highlighted last summer by the Carbon Tracker Initiative. . . The number describes the amount of carbon already contained in the proven coal and oil and gas reserves of the fossil-fuel companies, and the countries (think Venezuela or Kuwait) that act like fossil-fuel companies. In short, it’s the fossil fuel we’re currently planning to burn. And the key point is that this new number – 2,795 – is higher than 565. Five times higher. . .
Yes, this coal and gas and oil is still technically in the soil. But it’s already economically above ground – it’s figured into share prices, companies are borrowing money against it, nations are basing their budgets on the presumed returns from their patrimony. It explains why the big fossil-fuel companies have fought so hard to prevent the regulation of carbon dioxide – those reserves are their primary asset, the holding that gives their companies their value. It’s why they’ve worked so hard these past years to figure out how to unlock the oil in Canada’s tar sands, or how to drill miles beneath the sea, or how to frack the Appalachians.
If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn’t pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today’s market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you’d be writing off $20 trillion in assets. [My emphasis] The numbers aren’t exact, of course, but the carbon bubble makes the housing bubble look small by comparison. It won’t necessarily burst – we might well burn all that carbon, in which case investors will do fine. But if we do, the planet will crater. You can have a healthy fossil-fuel balance sheet, or a relatively healthy planet – but now that we know the numbers, it looks like you can’t have both. Do the math: 2,795 is five times 565. That’s how the story ends.
If you haven’t read the whole of McKibben’s Terrifying New Math, read it now. Here’s the link again. When you’re ready to loop back and think more about the carbon bubble in particular, see From “peak oil” to “unburnable carbon”, which I wrote last year when Carbon Tracker’s Carbon Bubblereport was released. And by the way, it too is mercifully short.
The politics are a longer story. McKibben, a consummate literary journalist turned consummate organizer, is working hard, here, to focus attention on what I call the fossil cartel. This makes terrific sense, for all sorts of reasons. Back up far enough, though, and they come to this – while the extremely rapid reduction of global emissions is technologically and economically possible, the decisive action that we need would not be free (think about that $20 trillion in “stranded assets”). There would be powerful losers.
These losers can usefully be seen as a “carbon cartel” that consists of the fossil-energy companies, the fossil-energy exporting nations, and their innumerable satellites, agents, and camp followers. And that cartel is exactly where McKibben, and our friends at 350.org, and the folks at Oil Change International, and lots of others, are setting their sights. It’s an excellent focus. Hell, from the point of view of place-based and national activism, it’s probably the best we could hope for. It opens doors to real and useful insights. Like this one: