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'Carbon Bubble' Could Spark Global Financial Crisis, Study Warns (theguardian.com)
An anonymous reader quotes a report from The Guardian: The existence of a "carbon bubble" -- assets in fossil fuels that are currently overvalued because, in the medium and long-term, the world will have to drastically reduce greenhouse gas emissions -- has long been proposed by academics, activists and investors. The new study, published on Monday in the journal Nature Climate Change, shows that a sharp slump in the value of fossil fuels would cause this bubble to burst, and posits that such a slump is likely before 2035 based on current patterns of energy use. Crucially, the findings suggest that a rapid decline in fossil fuel demand is no longer dependent on stronger policies and actions from governments around the world. Instead, the authors' detailed simulations found the demand drop would take place even if major nations undertake no new climate policies, or reverse some previous commitments. That is because advances in technologies for energy efficiency and renewable power, and the accompanying drop in their price, have made low-carbon energy much more economically and technically attractive.
That's just a guess.
For many of you, this slump will happen right before you retire, crushing your savings and forcing you to stay in the working world, with now-shittier pay and even fewer job prospects.
But you are the lucky ones.
For me, it will happen just a few years after I have already retired, let my skills rust and myself age to the point of being unemployable....now with no passive income to speak of and no job prospects at all. And the costly medical issues that come with age.
The world is an unkind place.
Crucially, the findings suggest that a rapid decline in fossil fuel demand is no longer dependent on stronger policies and actions from governments around the world.
This dangerous trend can and will be stopped: We will use a combination of tariffs, executive orders and obscure WWII-era federal statutes to nationalize the energy sector and stamp out this "change" nonsense, ensuring that fossil fuel jobs in key voting districts will endure for decades to come!
It seems as though our vaunted financial indicators must be...a trifle off...in some way if a combination of cheaper energy efficiency measures and increase in availability of energy sources cheaper than the current low cost options would have negative effects on the economy.
How do you do that? The cost of a fair amount of energy(and often a lot of petrochemicals that will presumably be cheaper if less demand for using them as fuel means lower cost for purchasing them as feedstocks) is baked into pretty much every good and service imaginable. What sort of ghastly mistake does it take to turn "basically everything has become cheaper to produce" into a financial crisis?
The sane thing to do is to provide aid to modernize these countries.
You can't modernize an old mindset of tribal warfare with aid.
Maybe the aforementioned countries' rulers should spend some of their petrodollars on something other than super-yachts and building decorative islands at which to moor them?
Il n'y a pas de Planet B.
You expect a collapse in energy prices and the massive availability of cheap energy to negatively effect industrial economies ?
So that would be like the economic disasters that came about when people started burning coal for steam power or oil for the internal combustion engine, And electrification destroyed the worlds economy ?
The problem is volatility. These things don't happen in nice, smooth supply/demand curves. Even a 2% drop in demand would wreak havoc on the market... as some suppliers go offline (or bankrupt) the price spikes again, and you get a yoyo effect that could spiral out of control. The "light tight" oil coming out of these fracking plays is not a drop-in replacement for West Texas crude, it's a different product with very different economics -- with EROEI in the single digits, and most producers leveraged to the gills, not covering much more than their operating costs, even at $60/bbl. The whole business is a house of cards.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Oil reserves are increasingly hard to extract, so cheaper is not necessarily likely, even if demand falls. In fact if demand falls, then a lot of extraction becomes uneconomic, and production can fall off a cliff. You could end up with lots of ICE cars, but nothing much to power them with.
There's still a lot of cheap oil with low extraction cost, but the market price of oil is determined by the most expensive barrel, not the average. As demand drops just a little bit, these expensive barrels are taken out of the equation, and price will drop quickly.
You expect a collapse in energy prices and the massive availability of cheap energy to negatively effect industrial economies ?
No. He expects it to negatively effect the financial world which has a lot riding on the traditional energy users. Too big to fail is such due to the impact the failure itself has on the economy. Industry itself will be doing just fine as will the general economy. The fewer job prospects isn't really anything to do with the number of jobs as much as the competition.
Also your comparisons to the switch to coal and oil isn't quite fair. The coal and oil for its most part provided new opportunities rather than replacing existing ones. Buggy whip manufacturers aside the world economy wasn't propped up by people selling horses and hay. The same can not be said for the trillions of of dollars sitting in the oil industry. We are talking about active replacement / destruction of industries as the end goal now. Expect it to be quite different from the steam age.
Who remembers being told we are heading into a new ice age?
Sigh. In the 1970s, some people in the media claimed that there would be an ice age; scientists were in fact already talking about global warming https://skepticalscience.com/ice-age-predictions-in-1970s-intermediate.htm.
Why do we pay attention to this crap. It's just like a new fad diet.
Because this "crap" happens to be pretty accurate and pretty concerning. See e.g. https://xkcd.com/1732/, and look at changing sea ice levels http://nsidc.org/sites/nsidc.org/files/images/cryosphere/sotc/arctic-antarctic-anomaly-trend-1978-2017.png http://nsidc.org/cryosphere/sotc/sea_ice.html.