When the bubble bursts

Author: Amélie Labbé | Published: 30 Oct 2017

The global economy is moving away from fossil fuels. But markets could be in for a shock when the well runs dry

Meeting the 2015 Paris climate change conference goal of limiting global warming to below 2°C would mean leaving one-third of existing global oil reserves, one half of global gas reserves, and 80% of global coal reserves in the ground. Shifting the global economy towards a carbon-free – or at least a low carbon – future certainly won't be pain-free.

Many of the energy majors have invested billions in renewable and energy efficiency projects over the past few years to curb their reliance on fossil fuels. Government subsidy programmes have also been generous in helping these sectors take off, and make them an attractive proposition from a business and financial perspective.

But while the UK's BP highlights in a recent earnings report that a 'diverse mix of fuels and technologies...