Page 24 - index
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iN Focus: cop21

terriFYiNg math:

how carboN

tracker chaNged

the climate debate

For decades fossil fuels were seen as a safe bet – untl one simple study by a team of fund managers in 2011.

by ed King

“I think it’s a bollocks subject. I’m not interested in this kind of representng the ‘carbon bubble’ of assets that cannot be used through
subject. I think this is complete hot air.” the streets of New York ahead of the 2014 UN climate summit.
This was the fruity view of an oil and gas trader in 2011, when asked The bubble eventually burst in Wall Street, on the horns of the
to comment by the FT on a study suggestng fossil fuel reserves could Merrill Lynch bull.
become stranded assets due to new climate laws.
The world’s top oil, gas and coal majors have long resisted pressure
Not so long ago the idea oil, gas and coal companies could be from environmentalists to take climate change seriously.
wildly overvalued and at risk from future greenhouse gas cutng
regulatons was greeted with scorn. For years, many bankrolled climate denial campaigns, secretly
lobbying governments to water down green laws while investng
Roll on four years and the ‘Unburnable Carbon’ report by the Carbon heavily in exploring new reserves across the planet.
Tracker Initatve – a group of ex-fund managers, oil analysts and
lawyers – has big oil running scared. “The [climate] models aren’t that good,” Exxon-Mobil chief executve
Rex Tillerson told shareholders earlier this year. Peabody Energy CEO
These scions of capitalism were even embraced by ant-capitalist Greg Boyce spun a similar line to his investors.
protestors, who carried a giant infatable silver and black ball
The science is “fawed”, he said. The supposed climate crisis was a
Historically generous dividends from fossil fuel investments once
insulated chief executves like Tillerson and Boyce from critcism.
Shareholders knew they were on a winner.
That confdence has started to wane, cracked by the collapse in
global oil prices and the implosion of the US coal industry.

Amid the fnancial carnage, the Carbon Tracker Initatve (CTI), a small
London-based NGO, started to create headlines the fossil fuel giants
dreaded. The slump was not a one-of, it warned. Oil, gas and coal
were no longer the safe bets of old.
Mark Campanale is not your typical tree hugger, favouring expensive
suits over hessian shirts. Afer dabbling in green actvism at York
University in the early 1980s, the founder of CTI became a fund
manager, working his way through Jupiter Asset Management, AMP
Capital and Henderson Global Investors.
Few were interested in his theories about the risks associated with
high carbon investments. But Campanale had tracked US coal stocks
throughout the 1990s and early 2000s and was convinced they were
In 2011, the Carbon Tracker Initatve launched its seminal ‘Unburnable
Carbon’ study, warning many assets were over-valued. overpriced.
Photo: © Carbon Tracker.

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