When students started pressuring their universities to divest from fossil fuels, it felt like an important, if largely symbolic, gesture. But with the Church of England mulling similar measures, and the world's largest investors concerned about climate change, the implications of divestment for the energy sector are increasingly serious.
So news, reported over at Business Green, that Norway's government is reviewing a fossil fuel divestment plan is an extremely big deal indeed.
Norway, which built its wealth on oil and gas exploration, has made significant strides toward a post-carbon economy already, becoming the leading European market for electric vehicles, and running its economy primarily off hydropower. But, if the plan is approved, moving its money from dirty sources of energy may be its most significant step yet.Here's how Business Green describes the potential impact:
Any move by the Norwegian wealth fund to offload its fossil fuel assets would send shockwaves around global markets, given that the fund, itself built on the country's offshore oil and gas revenues, holds an estimated 1.3 per cent of global market capitalisation. It is also a major investor in the energy industry, with sizeable holdings in BP and Shell, and 8.6 per cent of its equity portfolio in oil and gas, according to AFP reports.
This is no longer simply about "ethical investment" either.
With the energy sector showing signs of profound, disruptive change, and with the former chairman of Duke Energy arguing that a price on carbon is inevitable, investors are rightly spooked by the prospect of a carbon bubble—whereby fossil fuel assets become stranded because they either can't be exploited due to climate concerns, or clean energy alternatives simply squeeze them out of the marketplace.
Not long ago, that prospect seemed fanciful. Yet with India planning record-shattering solar power plants, and with Tesla's "game changing" battery factory making both car and energy companies nervous, betting the future on fossil fuels feels increasingly risky.
The oil age won't last forever.
Norwegians know this better than most, and they appear to be looking for the next big thing.