The Gore War Over Climate Change
It’s a world war. It’s bloody. It’ll be fought to the last man. That war is over climate change.
Climate change D-Day has arrived. A massive new battlefront has been opened. It’s the business world.
The foot-soldiers on the new front are investors and venture capitalists. Their battlefields are equity markets, mercantile exchanges, investment firms and corporate boardrooms. Their commanding general is Al Gore.
Their goal is nothing short of total annihilation. Their enemy is the fossil fuel industry.
The public face of this new battleground appeared today in a Wall Street Journal piece titled, “The Coming Carbon Asset Bubble” by Al Gore and David Blood.
The Gore War
Former Vice President Al Gore is most famous for his advocacy promoting the fight against global climate change caused by human emissions of atmospheric greenhouse gases. Gore won a Nobel Peace Prize and an Academy Award for it.
But make no mistake. Gore is, and always will be, an investor. It’s not a bad thing, either, but first and foremost he is out to make money. He’s already nearly the first green energy billionaire. He intends to get even stinking richer by becoming the first green energy Warren Buffett.
The Carbon Bubble
Wars are won by taking the fight to the enemy.
That is what Gore did today in his WSJ article up against all $7 trillion worth of publicly traded fossil fuel companies.
I’ll spare you the economic gobbledygook over the difference between risk and uncertainty. It’s meaningless anyway.
In the article Gore cleverly writes about an economics concept called a “stranded asset”. A stranded asset is one held that can never be spent. The asset artificially inflates the value of the business(s) holding it.
That forms an asset bubble that will eventually burst just like the housing bubble burst in 2008.
In Gore’s case, the stranded asset is underground fossil fuel reserves owned by big oil companies. According to Gore, there are 2/3rds more fossil fuel reserves than can ever be cashed out. Thus, an asset bubble is building up that necessarily will collapse.
Because of that, Gore advocates divesting from fossil-based energy companies… thus destroying the enemy!!
It’s all nice, neat and tidy… and WRONG!
The Fly in the Ointment
Gore’s entire “stranded asset” foundation is built on a political goal.
The goal is that the UN makes good on holding Earth’s governments into meeting its newly defined “carbon budget” top limit of 800-850 GtC of total emissions accumulated since 1750. GtC means gigatons of carbon.
If accomplished, it would render 2/3rds of the world’s fossil fuel reserves unusable “stranded assets”.
The IPCC defined “carbon budget” is supposed to hold the planet’s temperature rise below +2ºC. Its a UN suggestion that it turned into a political target.
There is nothing magical about +2ºC. Nothing in science suggests it’ll trigger runaway global warming if it isn’t met. In fact temperature rises and falls greater than that have happened naturally zillions of times in geologic history without ill effects.
+2°C is just a nice round number.
Earthlings have already burned through more than half their UN allotted budget. Earth’s temperature has risen +0.85ºC and we’ve used up 545GtC of the UN’s “carbon budget”. Optimistically assuming the upper limit is 850 GtC then, at 2011’s pace of 9.5 GtC/year, Earth’s “carbon budget” will be fully exhausted by the year 2043!
Heck, most of the world’s biggest polluters – China, United States, India, Japan, Iran, Canada, South Korea, Mexico, South Africa, Saudi Arabia, Indonesia and Brazil – are either UN exempt from reducing their emissions or dropped out of Kyoto. That is 12 out of the 17 biggest polluters on Earth, including 4 of the top 5!
Staying within the “carbon budget” now is… welll… literally impossible!
Al Gore knows all that. He just wants to stick it to big oil so he can get richer promoting investments in expensive, profitable alternatives.
Gore, of course, didn’t come up with the clever “stranded asset” theory on his own.
Gore parroted it, uncredited, in the WSJ from a document called, “Unburned Carbon 2013: Wasted capital and stranded assets” published by England’s “Grantham Research Institute on Climate Change and the Environment” last April. Given Gore has never talked like this before, he probably just discovered Grantham.
Al, though, knows a good money-making opportunity when he sees it.
In the meantime, unaware there is a war, big oil just keeps chugging along amassing more fossil fuel reserves, supplying the world with plentiful, affordable energy and reducing global CO2 emissions more than all green energy initiatives combined… while Al Gore just talks.