Representative image

(Sarath Kumar/TOI, BCCL)

According to a report from the financial think-tank “Carbon Tracker” released on Thursday, global stock markets are funding corporations that have three times as much coal, oil, and gas reserves than can be burned without going over the 1.5°C Paris climate target.

It also reveals that the “embedded emissions” — the amount of CO2 released if the fossil fuels are extracted and burned to create their products — in the fossil fuel reserves of companies listed on global stock exchanges has grown by nearly 40 per cent in the last decade despite a growing urgency to tackle climate change risks.

The report further warns that 90 per cent of all known fossil fuel reserves and resources held by all companies must stay in the ground as unburnable carbon to limit global warming to 1.5°C. But if more than 40 per cent of reserves are extracted and burned, the world will comfortably pass 2°C, with devastating consequences.

Author of the report and Oil and Gas Analyst at Carbon Tracker, Thom Allen, said: “If governments are really serious about climate change they must ensure that the activities of stock exchanges and the financial centres around them are consistent with national climate goals and net-zero commitments or we will lose any chance of meeting the Paris target.”

“This is especially important now as fossil fuel prices and related company stocks soar.”

Unburnable Carbon: Ten Years On” follows Carbon Tracker’s seminal Unburnable Carbon report in 2011, which put finance at the heart of the climate debate. It showed for the first time that there were far more fossil fuel reserves around the world than could be burned while meeting global climate goals, with huge implications for financial markets.

The report shows how stock markets, and the associated industry of banks, insurers, lawyers and financial services providers, are profiting from activities that are at odds with their countries’ climate commitments and that put investors at risk.

Mounting concern about the impact of climate change has seen investors with more than $130 trillion of assets under management commit to achieving net-zero emissions by 2050. The report calls on them to actively use their influence to guide companies towards a strategy that supports global climate goals and reduces their exposure to energy transition risks.

At the start of 2022, only 320 billion tonnes of greenhouse gases (320 GtCO2) can be emitted for 66 per cent of limiting warming to 1.5°C. At current rates of emissions, this will be exhausted in just eight years by 2030.


The above article has been published from a wire agency with minimal modifications to the headline and text.