Scientists are in full agreement that CO2 from burning fossil fuels has fundamentally altered Earth’s climate. Without action, consequences include drought, starvation, chaos and war. The Pentagon calls climate change a “threat multiplier” and a national security risk.
To avoid the worst, we must hold global warming to 2°C (we are already halfway there), by keeping about 80% of known coal, gas and oil reserves in the ground. The companies owning these assets are therefore greatly overvalued. In economic terms, it’s a “carbon bubble”, and remains an elephant in the room for investors. Our business community calls climate change a “risky business”, recognizing that a rapid switch from fossil fuels to clean energy is by far the safest path for our economy. The social cost of carbon is simply too high. In recent years, even stalwart conservative voices have argued for a tax on carbon, including James Baker, and former Exxon CEO Rex Tillerson.
The natural gas industry has long claimed that natural gas is a “clean bridge fuel”, since it produces less CO2 than coal. However, as NASA has confirmed, large amounts of “fugitive methane emissions” escape during harvesting and delivery of natural gas. Methane is up to 86X more potent than CO2 over a 20-year time frame, making gas just as bad as burning coal.
Unbelievably, we are all subsidizing the fossil fuel industry. According to the IMF, the production and burning of coal, oil and gas was subsidized to the tune of $5.9 trillion in 2020, or $11 million per minute. Not a single country, they point out, is pricing its fuels “sufficiently to reflect their full supply and environmental costs.” The first step in getting market forces to help us address climate disruption is to price carbon fuels accurately, and stop pretending that illness, war, extreme weather, climate mitigation, and forced retreat from our coasts are costs we can continue to overlook!