Burn, baby, burn

Lord Stern estimated that it would require 1 per cent of GDP to move to clean and sustainable energy sources.

In 2012 the top 200 corporation spent a sum equivalent to 1 per cent of global GDP to find new sources of carbon energy. Carbon assets are currently valued at trillions of dollars but about two thirds of them will have to remain permanently unburnt to comply with current (though unformalised) international agreements on climate change.

'They only believe environmental regulation when they see it," said James Leaton, from Carbon Tracker and a former PwC consultant. He said short-termism in financial markets was the other major reason for the carbon bubble. "Analysts say you should ride the train until just before it goes off the cliff. Each thinks they are smart enough to get off in time, but not everyone can get out of the door at the same time. That is why you get bubbles and crashes."

'Paul Spedding, an oil and gas analyst at HSBC, said: "The scale of 'listed' unburnable carbon revealed in this report is astonishing. This report makes it clear that 'business as usual' is not a viable option for the fossil fuel industry in the long term. [The market] is assuming it will get early warning, but my worry is that things often happen suddenly in the oil and gas sector."'

'Stern and Leaton both point to China as evidence that carbon cuts are likely to be delivered. China's leaders have said its coal use will peak in the next five years, said Leaton, but this has not been priced in. "I don't know why the market does not believe China," he said. "When it says it is going to do something, it usually does." He said the US and Australia were banking on selling coal to China but that this "doesn't add up"'

'Jeremy Grantham, a billionaire fund manager who oversees $106bn of assets, said his company was on the verge of pulling out of all coal and unconventional fossil fuels, such as oil from tar sands. "The probability of them running into trouble is too high for me to take that risk as an investor." He said: "If we mean to burn all the coal and any appreciable percentage of the tar sands, or other unconventional oil and gas then we're cooked. [There are] terrible consequences that we will lay at the door of our grandchildren."'

http://www.guardian.co.uk/environment/2013/apr/19/carbon-bubble-financial-crash-crisis

'"Now, with strong interconnections, and uneven recovery, that three-speed recovery is not enough and what we need is a full-speed global economy." Lagarde said growth needed to be "solid, sustainable, balanced but also inclusive and very much rooted in green developments."

'The IMF managing director said central banks were travelling in "uncharted territories" and would be more comfortable if they could return monetary policy to more normal settings.'

New deal; old deal

Having over the past few years poured hundreds of billions of pounds into 'the economy' only to find it disappear, mostly, into the unfathomable maw of the glabalised banks, our government has decided that a little more direct stimulus is in order.

Suspending planning regulations so that hosueholders can, in some cases, cover almost the whole of their back gardens with house extensions without seeking permission might not quite get us back to prosperity, and so a little investment in 'infrastructure' is now in order. That's roads of course, and so we dust off the old plans for roads that decades ago we judged socially, economically and above all environmentally undesirable. That's the way to face up to the new international challenges our prime minister has just been telling us about at the Conservative party conference - sink or swim, do or die.

For the Confederation of British Industry this is the brave new world, that has such middle eastern and asian investors in it. They will finance these new old roads so that the cash hoards we have left them with by buying their oil and manufactured products will finance the building of our roads which we will then pay them to use. Another turn of the wheel. According to the CBI our road system is the last unprivatised utility or public service left in the UK. Presumably they think the National Health Service has gone already - the police on its way? Move along there, there's nothing to see.


The CBI's green and pleasant land