stranded assets Concepts

The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth

by Jeremy Rifkin · 9 Sep 2019 · 327pp · 84,627 words

the energy industry, reports that the steep decline in the price of generating solar and wind energy “will inevitably lead to trillions of dollars of stranded assets across the corporate sector and hit petro-states that fail to reinvent themselves,” while “putting trillions at risk for unsavvy investors oblivious to the speed

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of the unfolding energy transition.”19 “Stranded assets” are all the fossil fuels that will remain in the ground because of falling demand as well as the abandonment of pipelines, ocean platforms, storage

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-producing nation, will be caught in the crosshairs between the plummeting price of solar and wind and the fallout from peak oil demand and accumulating stranded assets in the oil industry.22 Let’s be clear that this Great Disruption is occurring, in large part, because the marketplace is speaking. Every

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of transport, and changes in habitats—for example, the shift from postal communication to the telephone, or from the horse and buggy to the automobile. Stranded assets are usually a subject of interest only to accountants. However, lately the term has suddenly burst into the public arena, at least within financial circles

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accompanying digital technologies of a smart twenty-first-century Third Industrial Revolution. Much of the early pioneering work in examining the trajectory and impact of stranded assets within industries and across supply chains has come from the Smith School of Enterprise and Environment, an interdisciplinary hub of the University of Oxford, and

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and consumption in preparation for its presidency of the G20 Summit in 2017. A part of that report ran scenarios on the potential cost of stranded assets brought on by the accelerating transformation from a fossil-fuel-driven civilization to a renewable-energy-powered society. IRENA ran a two-timeline-scenario projection

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on the adoption of renewable energies and the speed of energy efficiency deployment to assess how each timeline will affect the magnitude of stranded assets across upstream energy (energy at its source), power generation, and buildings and industry, the “three large sectors that are responsible for approximately three-quarters of

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approximately $7 trillion, while under the accelerated early transition REMap scenario, the stranded fossil fuel assets would come in at $3 trillion in losses. The stranded assets would represent 45–85 percent of the assumed valuation of today’s oil upstream production.69 In power generation, under the delayed scenario, fossil-fuel

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disrupt the transportation sector. Together, feeding off each other, they portend a complete upheaval of mobility and logistics around the world, leaving a trail of stranded assets, the magnitude of which is difficult to fully comprehend. The meshing of the Communication Internet and the Renewable Energy Internet makes possible the build-out

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to. The study cuts right to the chase, estimating that the European automotive sector alone is at risk of €243 billion ($277 billion) in stranded assets as the transportation revolution unfolds on the continent. It should be noted that the total enterprise value of the European auto industry as of 2017

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.26 Are they right? Do the other giant oil companies agree, or are they still bullish on a more extended future for their industry before stranded assets become a reality? We may already have an answer. Bernstein Research, one of the energy industry’s most respected market forecasters, warned in a

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reserves beyond ten years for fear of devastating losses brought on by the exploration and capture of oil that will never be used—to wit, stranded assets. With investors already clamoring for the oil companies to return cash to shareholders rather than spend it on replenishing oil that may never be burned

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Muldoon-Smith, lecturer, and Paul Greenhalgh, associate professor, explain the importance of this act: Energy Performance Certificates (EPCs) have a significant relationship with climate-related stranded assets in real estate. They are a key enabler of building improvements, as they influence decision-making in real estate transactions and provide cost-optimal recommendations

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integrating electricity between base and peak load times, are equally suited to the task of maintaining the stability of electricity demand.20 When the terms “stranded assets” and “carbon bubble” are thrown around, the dire implications of what these emerging realities might mean for the world economy and civilization are often lost

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conditions were ripe for creating the perfect storm. The profitability of gas- and coal-fired power plants plummeted, and so did their utilization. They became stranded assets. It’s worth remembering that the fossil-fuel-based power and electric utilities in EU countries collapsed when renewable energies comprised only 14 percent of

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the total market, leaving a heap of stranded assets behind. The losses totaled more than €130 billion ($148 billion) in the European electricity sector in just the six-year period from 2010 to

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-year infrastructure build-out of gas pipelines across continents and installing numerous gas-fired power plants, upping the tally of global warming emissions and future stranded assets. Turning a Blind Eye in North America So the “gas rush” is on and two of the biggest players are in North America. The

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plants currently proposed or under construction, along with $32 billion of proposed gas pipelines to serve these power plants, are already at risk of becoming stranded assets. This has significant implications for investors in gas projects (both utilities and independent power producers) as well as regulators responsible for approving investment in vertically

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other industries, the chemical company leaders are keen to reduce CO2 emissions to slow down climate change and are increasingly alarmed about the prospect of stranded assets going forward. Products from these R&D initiatives are beginning to reach the market. For example, airlines including United, Qantas, and KLM already use some

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sector might not be fully aware of how quickly climate change is affecting investment risks across virtually every sector of the global economy, including potential stranded assets in the fossil fuel sector and closely coupled industries, Mark Carney stepped in a second time. Aside from his role as governor of the Bank

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system. The FSB includes all G20 major economies and the European Commission. Carney realized that the banking system was ill prepared for the barrage of stranded assets coming its way. So he and the FSB established the Task Force on Climate-Related Financial Disclosures (TCFD), chaired by Michael Bloomberg. Its thirty-two

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a set of guidelines that could be used by investors, lenders, banks, and insurance companies to model risks and opportunities to mitigate damage caused by stranded assets, as well as to initiate projects more aligned with reducing global warming emissions and prepare the appropriate criteria and data-collecting disclosure information to which

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Voice Increasing concern over climate change, loss of confidence in the long-term financial stability of the fossil fuel industry now facing the prospect of stranded assets, and the growing competitive advantage of emerging solar, wind, and other renewable energies are triggering a reevaluation of funding priorities within the global financial sector

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their beneficiaries, it would be difficult to conceive how this might be done by locking investments into a dying Second Industrial Revolution infrastructure with its stranded assets and declining business models. The Green New Deal is all about infrastructure: Broadband, Big Data and digital communication, near-zero marginal cost, zero-emission green

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It Cost? How much investment are we talking about to mend parts of the Second Industrial Revolution and decommission other parts that move into the stranded assets column? And how much investment will we need to spend on the smart new zero-emission Third Industrial Revolution infrastructure? Oxford Economics reports that the

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tax breaks the White House has in mind are almost universally connected to bolstering the antiquated fossil fuel infrastructure, much of which is quickly becoming stranded assets. The wiser course of action would be for the federal government to provide tax credits, tax deductions, tax penalties, grants, and low-interest loans to

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chapter 2, the four giant power and electricity companies in Germany learned this lesson the hard way and were left with billions of dollars in stranded assets in less than twelve years from the time that solar and wind energy came online. Recall that in Germany, small players—farmers, SMEs, and

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/news/chicagos-rev-how-comed-is-reinventing-itself-as-a-smart-energy-platform/416623/ (accessed February 7, 2019). 67. Ibid. 68. Ben Caldecott et al., Stranded Assets and Renewables: How the Energy Transition Affects the Value of Energy Reserves, Buildings and Capital Stock, International Renewable Energy Agency, 2017, 5. 69. Ibid., 6

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. Garrett-Peltier, Employment Estimates for Energy Efficiency Retrofits of Commercial Buildings, 2. 40. Kevin Muldoon-Smith and Paul Greenhalgh, “Understanding Climate-related Stranded Assets in the Global Real Estate Sector,” in Stranded Assets and the Environment: Risk, Resilience and Opportunity, ed. Ben Caldecott (London: Routledge, 2018), 154; Kevin Muldoon-Smith and Paul Greenhalgh, “Suspect

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Foundations: Developing an Understanding of Climate-Related Stranded Assets in the Global Real Estate Sector,” Energy Research & Social Science 54 (August 2019): 62. 41. M. J. Kelly, Britain’s Building Stock—A Carbon Challenge

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(London: DCLG, 2008). 42. Ben Caldecott, “Introduction: Stranded Assets and the Environment,” in Caldecott, Stranded Assets and the Environment, 6. 43. “More Than 250 US Mayors Aim at 100% Renewable Energy by 2035,” United Nations, June 28, 2017, https

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/news/more-than-250-us-mayors-aim-at-100-renewable-energy-by-2035 (accessed March 24, 2019). 44. Muldoon-Smith and Greenhalgh, “Understanding Climate-related Stranded Assets in the Global Real Estate Sector,” 157. 45. Ibid., 158. 46. Ibid., 159. 47. Lara Ettenson, “U.S. Clean Energy Jobs Surpass Fossil Fuel Employment

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Cisco Citigroup Claassen, Utz climate change and freshwater and history of the Green New Deal and peer assembly governance and poverty and public health and stranded assets and wealth See also global warming; greenhouse gas emissions climate change policy and leadership climate-neutral 2050 game plan (European Union) Global Covenant of Mayors

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and First Industrial Revolution and Germany and Hauts-de-France (Green New Deal roadmap) and pension capital debate (1946) and railroads and South Korea and stranded assets and US public land Cohn-Bendit, Daniel cold war Commonwealth Edison Communication Internet Condorcet, Nicolas, Marquis de ConocoPhillips Conservation Corps Consoli, Angelo Cook, Tim Copenhagen

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–NGL) Exelon Utilities Facebook Farmers Insurance Group Federal Housing Administration (FHA) feed-in tariffs Fields, Mark financial sector Bank of America Bank of England and stranded assets See also investment; pension funds Financial Stability Board (FSB) First Industrial Revolution and building sector definition of and family and kinship and fossil fuels ideological

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sector from decoupling of ICT and telecommunications sector from decoupling of transportation sector from infrastructure post-tax subsidies for See also coal; natural gas; oil; stranded assets Franklin, Benjamin French Revolution Friedman, Milton fuel-cell vehicles. See also electric vehicles Gabriel, Sigmar Garcetti, Eric Gates, Bill Geis, Aurora Gen Z general-purpose

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land and Renewable Energy Internet tax credits and other incentives for and transportation sector South Africa Southern Company specialized competencies Stein, Jill Steinmeier, Frank-Walter stranded assets banking and insurance sectors building sector and creative destruction definition of electricity sector and Germany and Great Disruption warning signs ICT and communication internet sectors

Green Swans: The Coming Boom in Regenerative Capitalism

by John Elkington · 6 Apr 2020 · 384pp · 93,754 words

business language evolving in something like real time. The ten terms spotlighted here are Purpose, Business Model, Profit, Growth, Value, Impact, Liability, Materiality, Governance, and Stranded Assets. None of these would seem to be obviously connected with the potential generation of market miracles, but together they offer a kaleidoscopic view of some

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. To understand such risks better, growing numbers of businesses use Materiality tests as part of their corporate Governance processes. The reason why we have left Stranded Assets to last—and this was the only term in the list not covered by the FT Lexicon when consulted—is that it provides a natural

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’ Quest.51 If your top team has yet to dip its toes into exponential waters, maybe it is time to give it a go. 10. STRANDED ASSETS Some of the most important work in the world is done, and some of the most important new business concepts and language are introduced by

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, not-for-profit organizations. One of my favorites has been the Carbon Tracker Initiative. Among other things, they repurposed the concept of stranded assets to get people thinking about the structural implications of global warming for our economies and for particular industry sectors and companies. Such market activism is

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and the exponential growth of new technologies in renewable power generation and electric vehicles, could ensure that the oil industry’s vast reserves turn into stranded assets, undermining pension funds heavily invested in old forms of energy—and triggering both mass unemployment and, as a consequence, new waves of populist politics. Recall

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relevant as the role of software and imported batteries grows.50 Elsewhere, we could see “fire sales” of carbon intensive assets as the risks of stranded assets in the fossil fuels sector grow, destabilizing the financial system, warned Bank of Canada governor Stephen Polos.51 So, whether they are designing cars or

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of their value when the shift to green energy gains real momentum.75 Today’s $160 billion tanker market would see a rising tide of stranded assets, with few other cargos available to fully replace fossil fuels. All of this was predicted. One interviewee for our Green Swan Day film was Mark

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his 2011 report, Unburnable Carbon–Are the World’s Financial Markets Carrying a Carbon Bubble?76 His answer: They are. While some investors fret about stranded assets, tougher souls look for “cockroach stocks,” businesses that can survive no matter what happens!77 But our best hope lies in the pioneers pushing the

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-in-jail-carlos-ghosn-timeline. 50.https://su.org 51.https://leadersquest.org 52.http://lexicon.ft.com/ 53.“Stranded Assets,” Carbon Tracker, August 23, 2017. See: https://www.carbontracker.org/terms/stranded-assets/. 54.“Stranded Assets.” CHAPTER 2 1.See the “Gradually, Then Suddenly” section of this chapter. 2.I have been very much influenced

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–53 governance, 70–71 growth, 55–58 impact, 61–64 liability, 64–68 materiality, 68–70 overview, 46–48 profit, 53–55 purpose, 48–50 stranded assets, 71–73 value, 58–61 business-to-business platforms, 132–134 C Cadwalladr, Carole, 169–170 Calasso, Roberto, 192–193 calories, as wicked problem, 98

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, Irwin, 5, 15, 196 Stiglitz, Joseph, 60, 204 stock exchanges, tracking wicked problems in, 90–91 Stockdale, James, 229 Stoermer, Eugene, 87 Stormer, Susanne, 159 stranded assets, 48, 71–73, 243 The Structure of Scientific Revolutions (Kuhn), 121–122, 191, 230 subsidies for fossil fuels industry, 67 Suez Western Australia, 134 The

Valuation: Measuring and Managing the Value of Companies

by Tim Koller, McKinsey, Company Inc., Marc Goedhart, David Wessels, Barbara Schwimmer and Franziska Manoury · 16 Aug 2015 · 892pp · 91,000 words

by both investors and governments, so they can adjust their strategies over a 5-, 10-, or 20-year time horizon and reduce the risk of stranded assets, or those that are still productive but not in use because of environmental or other issues. For any company, the complexity of addressing universal social

American Foundations: An Investigative History

by Mark Dowie · 3 Oct 2009 · 410pp · 115,666 words

debates over deregulation of the energy industry, in which the assets stranded by deregulation became a major obsession of the utilities. The NRDC proposed that stranded assets-that is, generation or transmission systems that would be uneconomical in a competitive marketbe amortized, either directly by ratepayers or indirectly through a bond issued

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a special assessment on consumers' energy bills. So, either way, the ratepayer was saddled with the stranded costs. California was an important early battleground over stranded assets, which nationwide are estimated at between $200 and $300 billion. In 1996, when the bond issue came before the state legislature, all eyes were on

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of the national environmental movement. The new organization's position, forcefully stated, was that utilities nationwide should be allowed to pass the investment losses from stranded assets on to consumers. Another East Coast Energy Foundation grantee, who spoke on background for fear of losing his funding, described the role played by the

The Ministry for the Future: A Novel

by Kim Stanley Robinson · 5 Oct 2020 · 583pp · 182,990 words

companies saw a chance of escaping with a viable post-oil business. The state-owned companies looked interested at the idea of compensation for their stranded assets, which they had already borrowed against, in the usual way of the rampant reckless financialization which was the hallmark of their time. Paid to pump

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a panic. Together they sat on fossil carbon reserves that at current market prices ranged into the hundreds of trillions. These reserves could easily become stranded assets in the very near future, in fact it looked a bit like a financial bubble starting to burst. In that context it made sense to

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scheme of things. The upshot of these policy implementation decisions was that the oil companies and petro-states were being paid in proportion to their stranded assets, but over time, and only for doing carbon-negative work, as defined and measured by the Paris Agreement standards and certification teams. The young staffs

This Changes Everything: Capitalism vs. The Climate

by Naomi Klein · 15 Sep 2014 · 829pp · 229,566 words

If the companies have miscalculated and we do get serious about leaving carbon in the ground, these huge projects will become what is known as “stranded assets”—investments that lose their projected value as a result of, for example, dramatic changes in environmental policy. When a company has a great deal of

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expensive stranded assets on its books, the stock market takes notice, and responds by bidding down the share price of the company that made these bad bets. This

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the annual GDP of the United Kingdom. If we were serious about keeping warming below 2 degrees, approximately 80 percent of that would be useless, stranded assets. Given these stakes, it is no mystery why the fossil fuel companies fight furiously to block every piece of legislation that would point us in

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2014, ExxonMobil confirmed as much when the company came under pressure from activist shareholders to respond to reports that much of its reserves would become stranded assets if governments kept promises to keep warming below 2 degrees by passing aggressive climate legislation. The company explained that it had determined that restrictive climate

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for the supposedly enlightened climate policies he introduced while mayor of New York City.III18 But while talking a good game about carbon bubbles and stranded assets (his company is set to introduce the “Bloomberg Carbon Risk Valuation Tool” to provide data and analysis to its clients about how fossil fuel stocks

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2°C,” Nature 458 (2009): 1161. For an updated analysis from Carbon Tracker, refer to: James Leaton et al., “Unburnable Carbon 2013: Wasted Capital and Stranded Assets,” Carbon Tracker Initiative, 2013. For 2 degree carbon budget estimates in the latest IPCC Assessment Report, see: “Summary for Policymakers,” in Climate Change 2013: The

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, 114 Stockman, Steve, 161 stock market crash of 1929, 10 Stone, Ed, 449 Stone, I. F., 153, 201 storm barriers, 108, 109 Strahl, Chuck, 362 stranded assets, 146 StratoShield, 262, 268n, 271 stratosphere, sulfur dioxide in: from volcanic eruptions, 258–59, 273–74 see also Pinatubo Option strontium-90, 203 structural inequity

Prosperity Without Growth: Foundations for the Economy of Tomorrow

by Tim Jackson · 8 Dec 2016 · 573pp · 115,489 words

, constraints on investment can stimulate positive impacts in terms of return, against the conventional logic.16 This argument has drawn support from the debate over ‘stranded assets’. The policy and economic risks associated with certain fossil fuel companies – particularly coal – are so high, argue proponents, that assets held in such companies are

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(Law Commission 2014: 97). 17 For instance, Carbon Tracker (2013). See also www.parliament.uk/documents/commons-committees/environmental-audit/Letter-from-Mark-Carney-on-Stranded-Assets.pdf (accessed 11 April 2016). 18 See, for example, Eurosif (2014). For an example of such outperforming funds, see www.alliancetrustinvestments.com/global/documents/3301

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at http://fieldguide.capitalinstitute.org/uploads/1/3/9/6/13963161/ppcepub.pdf (accessed 7 March 2016). Carbon Tracker 2013. ‘Unburnable Carbon: wasted capital and stranded assets’. London: Carbon Tracker. Online at www.carbontracker.org/wp-content/uploads/2014/09/Unburnable-Carbon-2-Web-Version.pdf (accessed 23 July 2016). Carbon Trust

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stewardship: role of the state 200; sustainable investment 168 Stiglitz, Joseph 53 stock-flow consistent (SFC) economic models 179–80 Stockholm Resilience Centre 17, 201 stranded assets 167–8 see also ownership structures of capitalism see economic structures struggle for existence 8–11, 125, 132–3 Stuckler, David 43 stuff see language

Rentier Capitalism: Who Owns the Economy, and Who Pays for It?

by Brett Christophers · 17 Nov 2020 · 614pp · 168,545 words

University Press, 2011), pp. 144–60. 94. See, for example, M. Cranny, ‘BP Rejects Concern Over Stranded Assets Amid “Slow” Energy Shift’, 20 February 2018, at bloomberg.com; D. Zhdannikov, ‘Shell Sees No Risk of “Stranded Assets” as Reserve Life Shrinks’, 12 April 2018, at reuters. com. 95. Cited in A. Juhasz, ‘Big Oil

The Grid: The Fraying Wires Between Americans and Our Energy Future

by Gretchen Bakke · 25 Jul 2016 · 433pp · 127,171 words

costs even higher for the remaining customers, who then have even more incentive to become self-sufficient.” Meanwhile, utilities are stuck with a bunch of stranded assets. Those big, expensive power plants the utilities built throughout the twentieth century aren’t needed much, if at all, anymore. They are still being paid

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Like,” Greentech Media, March 4, 2014, http://www.greentechmedia.com/articles/read/this-is-what-the-utility-death-spiral-looks-like. “with a bunch of stranded assets”: Lacey (2014). they are largely inactive: According to Thomas Kuhn from the Edison Electric Institute, in the United States in 2010, many of our largest

The Great Displacement: Climate Change and the Next American Migration

by Jake Bittle · 21 Feb 2023 · 296pp · 118,126 words

move out, the city will clear the land. All these proposals are more cost-effective than FEMA-funded buyouts, and could help rescue homeowners with stranded assets. The big uncertainty, says Siders, is whether there will be political will to enact them on a large scale. “It raises this question of, who