3. Does having fossil fuels cause loss?
Carbon Tracker Initiative (CTI)
In 2010, Dr. Leggett helped found the Carbon Tracker Initiative, a nonprofit think tank. He argued firmly that the continued use of oil, coal and other fossil fuels that discharged large amounts of carbon dioxide into the atmosphere would lead to irreversible climate change. Mark Campanale agreed with him. Based on this conviction, Dr. Leggett and Mark Campanale founded the CTI. Campanale served as the first CEO, and Dr. Leggett became the first chairperson.
While some people have never thought much about environmental issues, they tend to pay closer attention when they come to understand the actual impact of climate change and the potential for economic damage. CTI evaluates the impact of climate change on financial markets and publishes reports that are highly regarded by the financial services industry. One of the concepts that has significantly changed global perception of fossil fuels is the "carbon bubble."
What is a carbon bubble?
The carbon bubble refers to the overvaluation of fossil fuel-related assets resulting from progress in climate change mitigation efforts.
As the issue of climate change is taken more seriously, we can expect the use of fossil fuels to be significantly reduced. As this happens, many of the oil fields and coal mines currently owned by fossil fuel companies will likely fall out of use and lose their value as assets. Assets that lose value in the future are called "stranded assets." And at some point, like a bubble bursting, the value of the asset may disappear completely.
Despite this, banks and investors continue to supply money to companies in the fossil fuel industry, and these companies continue to develop oil and gas resources. On the other hand, what if people suddenly stop using fossil fuels? If they did, the world economy would become chaotic, and a serious economic crisis would occur. To fight climate change while also avoiding such a crisis, the world needs to transition away from fossil fuels in a gradual and orderly manner.
This is why the CTI and many experts warned that action needs to be taken before the carbon bubble bursts. CTI's warning was heeded by the financial services industry and helped accelerate the global divestment movement away from fossil fuels.
