Monday 30 December 2019

Mark Carney warns financial sector of danger of investing in oil and gas

Speaking to the BBC Radio 4 Today programme, Mark Carney repeated an earlier warning that unless firms woke up to what he called the climate crisis, many of their assets would become worthless.

“If we were to burn all those oil and gas (reserves), there’s no way we would meet carbon budget,” he said. “Up to 80% of coal assets will be stranded, (and) up to half of developed oil reserves.

“A question for every company, every financial institution, every asset manager, pension fund or insurer - what’s your plan?

The Bank of England has said assets worth up to $20tn (£16tn) could become worthless very quickly if the financial sector and businesses don’t move towards a zero-carbon economy.

Mr Carney will next year start a new role as the UN's special envoy for Climate Action.  In the interview he added,  “The concern is whether we will spend another decade doing worthy things but not enough... and we will blow through the 1.5C mark very quickly. As a consequence, the climate will stabilise at the much higher level.”

He also had a warning for climate change deniers: “We can’t afford on this one to have selective information, spin, misdirection… It needs to be absolutely clear because we are all in on it.

“To deliver, there needs to be shared understanding about what’s necessary. (However) it is reasonable for there to be debates at the margin about where does the role of the state stop - and what’s the role of markets.”