Macroeconomic impact of stranded fossil fuel assets

@article{Mercure2018MacroeconomicIO,
  title={Macroeconomic impact of stranded fossil fuel assets},
  author={J. Mercure and H. Pollitt and J. Vi{\~n}uales and N. Edwards and P. Holden and U. Chewpreecha and P. Salas and I. Sognnaes and A. Lam and F. Knobloch},
  journal={Nature Climate Change},
  year={2018},
  volume={8},
  pages={588-593}
}
Several major economies rely heavily on fossil fuel production and exports, yet current low-carbon technology diffusion, energy efficiency and climate policy may be substantially reducing global demand for fossil fuels1–4. This trend is inconsistent with observed investment in new fossil fuel ventures1,2, which could become stranded as a result. Here, we use an integrated global economy–environment simulation model to study the macroeconomic impact of stranded fossil fuel assets (SFFA). Our… Expand

Figures and Tables from this paper

Between stranded assets and green transformation: Fossil-fuel-producing developing countries towards 2055
Abstract Climate-related asset stranding refers to the depreciation of assets – such as resource reserves, infrastructure, or industries – resulting from the unanticipated changes, such as theExpand
Climate Actions and Stranded Assets: The Role of Financial Regulation and Monetary Policy
Limiting global warming to well below 20C may result in the stranding of carbon-sensitive assets. This could pose substantial threats to financial and macroeconomic stability. We use a dynamicExpand
Divestment may burst the carbon bubble if investors' beliefs tip to anticipating strong future climate policy
To achieve the ambitious aims of the Paris climate agreement, the majority of fossil-fuel reserves needs to remain underground. As current national government commitments to mitigate greenhouse gasExpand
Low‐carbon transition risks for finance
Transition risks for finance arise from the transition to a low-carbon economy, which can disrupt the ability of carbon-intensive industries to meet their financial obligations and lead to abruptExpand
The public costs of climate-induced financial instability
Recent evidence suggests that climate change will significantly affect economic growth and several productive elements of modern economies, such as workers and land1–4. Although historical recordsExpand
How Colombia can plan for a future without coal
Many countries – even those that recognise the need to curb global greenhouse gas emissions – continue to rely on fossil fuel exploitation as part of their economic development strategies and toExpand
Keeping it in the ground? Assessing global governance for fossil-fuel supply reduction
Abstract Restricting the international supply of fossil fuels is increasingly acknowledged as a necessary part of achieving long-term global temperature goals. However, the barriers to imposing suchExpand
Capital stranding cascades: The impact of decarbonisation on productive asset utilisation
This article develops a novel methodological framework to investigate the exposure of eco- nomic systems to the risk of physical capital stranding. Combining Input-Output (IO) and network theory, weExpand
Stranded investment associated with rapid energy system changes under the mid-century strategy in Japan
Japan’s mid-century strategy to reduce greenhouse gas (GHG) emissions by 80% by 2050 requires rapid energy system changes, which may lead to stranded assets in fossil fuel-related infrastructure.Expand
Conflicting commitments? Examining pension funds, fossil fuel assets and climate policy in the organisation for economic co-operation and development (OECD)
Abstract The 2015 Paris Agreement on Climate Change implicitly calls for leaving 80% of coal, 50% of gas and 33% of oil reserves underground. This paper studies the scarcely addressed relationshipExpand
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 87 REFERENCES
CO2 emission mitigation and fossil fuel markets: Dynamic and international aspects of climate policies
This paper explores a multi-model scenario ensemble to assess the impacts of idealized and non-idealized climate change stabilization policies on fossil fuel markets. Under idealized conditionsExpand
Coping With Collapse: A Stock-Flow Consistent Monetary Macrodynamics of Global Warming
This paper presents a macroeconomic model that combines the economic impact of climate change with the pivotal role of private debt. Using a Stock-Flow Consistent approach based on the Lotka–VolterraExpand
Potential emissions of CO2 and methane from proved reserves of fossil fuels: An alternative analysis☆
Abstract Scientists have argued that no more than 275 GtC ( IPCC, 2013 ) of the world’s reserves of fossil fuels of 746 GtC can be produced in this century if the world is to restrict anthropogenicExpand
GDP and employment effects of policies to close the 2020 emissions gap
Four policies might close the gap between the global GHG emissions expected for 2020 on the basis of current (2013) policies and the reduced emissions that will be needed if the long-term globalExpand
The role of money and the financial sector in energy-economy models used for assessing climate and energy policy
ABSTRACT This article outlines a critical gap in the assessment methodology used to estimate the macroeconomic costs and benefits of climate and energy policy, which could lead to misleadingExpand
Macroeconomic analysis of the employment impacts of future EU climate policies
This article gives a detailed account of part of the modelling that was carried out for the assessment of the EU's proposed energy and climate targets for 2030. Using the macro-econometric simulationExpand
Quantifying uncertainties influencing the long-term impacts of oil prices on energy markets and carbon emissions
Oil prices have fluctuated remarkably in recent years. Previous studies have analysed the impacts of future oil prices on the energy system and greenhouse gas emissions, but none have quantitativelyExpand
A stock-flow-fund ecological macroeconomic model
This paper develops a stock-flow-fund ecological macroeconomic model that combines the stock-flow consistent approach of Godley and Lavoie with the flow-fund model of Georgescu-Roegen. The model hasExpand
On the global economic potentials and marginal costs of non-renewable resources and the price of energy commodities
A model is presented in this work for simulating endogenously the evolution of the marginal costs of production of energy carriers from non-renewable resources, their consumption, depletion pathwaysExpand
The geographical distribution of fossil fuels unused when limiting global warming to 2 °C
TLDR
It is shown that development of resources in the Arctic and any increase in unconventional oil production are incommensurate with efforts to limit average global warming to 2 °C, and policy makers’ instincts to exploit rapidly and completely their territorial fossil fuels are inconsistent with this temperature limit. Expand
...
1
2
3
4
5
...