The growth in global carbon dioxide emissions from fossil fuel combustion ground to a halt last year for the first time in 40 years without the presence of a full-blown economic crisis. In that year the global economy grew by more than 3%, but the amount of carbon dioxide pumped out remained at the 2013 level of 32.3 gigatonnes. One main reason is that China has cut its use of coal, one of the biggest sources of carbon emissions, and installed more hydro-electricity, wind and solar power. At the same time electricity consumption, which had been growing at about 10% a year, has fallen to 3-4% as China imposes energy efficiency standards for industry, shuts older factories, and shifts away from heavy manufacturing which has driven its economic growth. But there is a further reason which is likely to consolidate these pre-existing trends even if global growth takes off again.
The worldwide campaign to pressurise divestment out of fossil fuels has been gathering pace in the run-up to the crucial summit meeting in Paris this December. It is based on 3 simple premises. According to almost consensual global scientific opinion the world cannot afford to let global temperatures rise by an average of more than 2 degrees above pre-industrial levels without extremely damaging and perhaps catastrophic climate change; it has already risen by 1% above that level. The world has already burnt 2.5 trillion tonnes of fossil fuels in the last 150 years. And third, the total availability of fossil fuels still unburnt is about 7.5 trillion tonnes. The implication is unchallengeable that if all this available global supply were burnt, global temperatures would rise far above 2 degrees and perhaps by as much as 4 or 5 degrees bearing in mind the unpredictable consequences of feedback effects which sharply accelerate global warming at crucial tipping points.
The argument for divestment from fossil fuel companies -oil, coal and gas – is based on earlier campaigns that succeeded by pulling money out of tobacco, arms, apartheid South Africa, and even slavery. If eventually the companies for the sake of human survival are prohibited from extracting a great many of the assets that they own, many of those assets will in time become valueless. In other words, they will be left with stranded assets. Long before that, those with a fiduciary duty to manage endowments, pension funds and other investor portfolios will rush to get their money out before the bubble bursts. The divestment campaign, now backed by the UN Framework Convention on Climate Change, is aimed to make investors aware of this sooner rather than later. Over time this could well turn out a decisive factor against the fossil fuel industries, arguably the most powerful lobby in the world after the banking and finance sector.