"If it is wrong to wreck the climate, then it is wrong to profit from that wreckage," states the Fossil Free movement in its mission statement. I noted earlier today how Naomi Klein is prodding the Big Green groups to see the moral case for divesting from fossil fuels. But according to a provocative article in The Economist, investing in fossil fuels may not just be immoral, it may be fiscally unwise, as well.
The share prices of oil, gas and coal companies depend in part on their reserves. The more fossil fuels a firm has underground, the more valuable its shares. But what if some of those reserves can never be dug up and burned?
Noting that governments and companies already have more oil, gas and coal than can safely be burned, The Economist writes the logical response "would be for governments to leave their reserves untouched and for companies to run theirs slowly down, returning more of what they earn to shareholders. Neither of these things is happening."
And in 2012, says Carbon Tracker, the 200 largest listed oil, gas and coal companies spent five times as much—$674 billion—on developing new reserves as they did returning money to shareholders ($126 billion). ExxonMobil alone plans to spend $37 billion a year on exploration in each of the next three years.
Such behaviour, on the face of it, makes no sense. One possible explanation is that companies are betting that government climate policies will fail; they will be able to burn all their reserves, including new ones, after all. This implies that global temperatures would either soar past the 2°C mark, or be restrained by a technological fix, such as carbon capture and storage, or geo-engineering.
It is important to note that this "technological fix" doesn't exist right now, so pushing the climate to unsafe levels of warming with the hope that we'll figure something out to fix that damage later is insanely irresponsible.
That is why this concept of unburnable fuel or "unburnable carbon" as Andy Revkin calls it, is so important.
A new buzz phrase in the push to limit greenhouse gas emissions is “unburnable carbon” — an effort to define and then wall off the portion of the world’s still-vast reserves of coal, oil or natural gas that might, if combusted, cause unacceptably costly or dangerous climate change.
This notion underlies a lot of campaigns, ranging from Ecuador’s effort to raise enough money from international contributors to “leave the oil in the soil” under its splendid Yasuní National Park to Bill McKibben’s “Do the Math” campaign to rid university and college endowments of fossil fuel investments.
Leaving some fossil fuels in the ground is the oft-overlooked option energy policy debates. From the Keystone XL pipeline to natural gas fracking, these destructive energy projects are framed by supporters as necessities. Proponents of tar sands extraction say we need Keystone XL to stop importing oil from the Middle East. And opponents to the pipeline say if it isn't approved, the tar sands will just be shipped another way, so we might as well build it. Supporters of fracking make a similar argument for energy independence and say it safer than coal, as if these are our only two choices for energy.
As Gasland's Josh Fox articulated, this week, these are false choices.
If Congress is going to ever act to pass effective climate legislation, it will be important that the range of options on the table contains the radical, but necessary option of leaving this stuff in the ground.
VIDEO: Ryan Cooper's remix of David Roberts' talk on why "climate change is simple"