The Sustainability Story Mark Campanale: The Carbon Bubble and Future of Fossil Fuels
Apr 7, 2025
Mark Campanale, founder of the Carbon Tracker Initiative, shares critical insights on the looming risks of fossil fuel investments. He introduces the concept of the carbon bubble and its implications for investors and regulators. The discussion highlights the challenges of stranded assets as the world shifts to renewable energy and electric vehicles. Mark emphasizes the urgent need for clear governmental guidelines to phase out fossil fuels, while underscoring the necessity for fund managers to adapt strategies to safeguard financial stability in a changing climate.
AI Snips
Chapters
Transcript
Episode notes
Carbon Bubble Explained
- The carbon bubble highlights the mismatch between fossil fuel reserves and the safe carbon budget for the climate.
- Most fossil fuel reserves must remain unburned to avoid climate disaster, impacting valuations and investments.
Understanding Stranded Assets
- Stranded assets exist physically and financially when reserves can't generate expected returns.
- Markets undervalue cleanup liabilities and potential asset write-downs from shortened fossil fuel asset lifespans.
Carbon Supply Cost Curve Insight
- Low-cost producers remain competitive; high-cost fossil fuel projects risk becoming unprofitable under carbon limits.
- Investors should model and stress test companies against a $30/barrel oil scenario to assess real risk.