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The post New poster child for strandedassets: Dakota Access Pipeline appeared first on ImpactAlpha. The contested pipeline, opposed by the Standing Rock Sioux Tribe and a broad coalition of activists, was increasingly an economic millstone.
The company is still committed to being net-zero by 2050, but observers say it’s a lot harder to see a pathway to reach such a goal without a stronger target for 2030. Follow This plans to introduce a resolution at BP’s annual general meeting in May calling for the company to align its 2030 targets with the Paris Agreement.
The Science Based Targets initiative makes clear that greenhouse gas (GHG) pollution must halve by 2030. Every dollar not spent in new ways to cut GHG and to stop the voracious linear economy is investing in future strandedassets. Pull Quote. Fink’s signal is not loud enough, especially for those in the back.
While European firms like TotalEnergies, BP and Eni plan to curtail production by 2030 and dramatically increase their capital expenditures on renewables, Canadian energy firms plan to expand production by 30% by 2030, growing at a rate that would overshoot Canada’s 2050 target for the oil and gas sector’s emissions by 94%.
Alongside the new Scope 3 target, however, Shell also eliminated a 2035 emissions intensity goal, and revised down its interim 2030 intensity goal as well. While the company had previously set 2030 targets to reduce its Scope 1 and 2 emissions, it had avoided setting an interim Scope 3 target.
The second aim states that signatories should achieve net-zero emissions from electricity consumption by 2030. Is Bitcoin the next strandedasset? Recent developments in technology suggest the industry has started putting plans into action, with the appearance of sustainable tools and infrastructures. But there's a catch.
Yet the pace and scale of their reductions is in the realm of what every company and country must do by 2030 to keep the faith of the Paris Agreement. About two-thirds of the GHG reductions achieved by these companies were genuine from the planet’s perspective; much of it came courtesy of efficiency measures or retiring polluting assets.
Fossil fuel demand falls 25% by 2030, fossil sector methane emissions drop by three-quarters, energy efficiency adoption doubles, global renewable energy capacity triples, and annual clean energy investment rises from US$1.8 trillion by the early 2030s in the latest net-zero roadmap published this morning by the International Energy Agency.
Delaying those actions “would lock in high-emissions infrastructure, raise risks of strandedassets and cost escalation, reduce feasibility, and increase losses and damages.” In energy supply, solar and wind deliver by far the highest net emission reductions through 2030 at the lowest cost. The dangers of overshooting 1.5°C
Canada’s Environment and Climate Change Minister Steven Guilbeault said: “By eliminating inefficient fossil fuel subsidies, we are encouraging smart and efficient government investment decisions that can increase Canada’s competitiveness in a decarbonizing global economy, while avoiding creation of strandedassets.
Build more investor confidence in green infrastructure projects The greatest fear that many investors have around investing in green infrastructure projects is that they become “strandedassets.” To prevent this, governments must make a long-term commitment to a green energy source such as hydrogen or nuclear. oil and gas).
The committee’s most recent report , published in July, called for swift action to achieve the UK’s 2030 target of reducing carbon emissions by 68% compared to 1990 levels. But we’ll have paid for it, so we’ll be using it rather than wind turbines and paying the wind energy firms to turn their wind off,” said Lord Deben. It’ll be a mess.”
Strandedassets, defaults in thermal power, steel and cement sectors may increase if companies do not shift to low-carbon alternatives. The stress tests found that the capital adequacy ratio would fall to 14.57% by 2030 under a ‘light pressure’ scenario, and to 14.27% under a ‘severe pressure’ scenario.
The evolving climate drives physical risks—damaged or strandedassets and business-interruption costs from severe weather events. Climate Value at Risk (CVaR)* is the economic value of physical and transition risks plus technological opportunities—one way of measuring the financial impact of climate change.
To maintain a chance to avoid the worst climate impacts, science says we need rapid, deep emissions cuts – at least 50 percent by 2030. Meanwhile, the cost of climate damage , already in the hundreds of billions of dollars , will continue to mount. Today, we need three to six times more investment to maintain a livable climate.
managing $446 billion, announced plans to invest $100 billion in climate solutions by 2030. This year, a record $1.8 trillion was poured into clean energy investment alone, far outpacing investment in fossil fuel energy, according to the International Energy Agency.
The shareholder resolution encourages TotalEnergies to become “the first oil and gas giant that has its targets for 2030 completely 1.5°C C aligned and be an example for others in the sector”, he added. Pressure on Amazon.
This massive energy consumption comes with a hefty carbon footprint that would thwart the global effort to halve carbon emissions before 2030. VM Desired State Configuration (VMDSC), a downloadable vCenter appliance , addresses this issue — making it easy and low-risk to resize VMs and recover strandedassets for productive use.
BP has cut its oil and gas production reduction target from 40% to 25% by 2030, Shell dropped its goal to cut oil production by the same deadline, and TotalEnergies plans to increase both its oil and gas production by 2-3% per year until 2028. C pathway by 2050 would requires as much as 50% by 2030. Last year, Shell invested US$5.6
Climate-focused investors welcomed the change from the coal-wielding Scott Morrison, calling for an “investment grade 2030 emissions target”, and accompanying policy changes, including a National Transition Authority. Even so, we were reminded how far the G20 nations are from meeting their COP26 commitment to keep 1.5°C
Exercising influence Worldwide, i nvestments in nature-based solutions (NbS), such as reforestation, or flood recovery, need to more than double by 2030 to US$384 billion, and the newly agreed Global Biodiversity Framework calls for at least US$200 billion of private sector capital a year. The capacity to employ this capital is huge.
Rasmussen expects the scheme to meet its target – self-imposed, but in line with the protocol set by the Net Zero Asset Owner Alliance (NZAOA) – to reduce greenhouse gas (GHG) emissions from its listed equities and corporate bonds by 45% by the end of 2024, from a 2018 base. Some managers might not cover Scope 3 emissions,” he notes.
Transition plans should demonstrate alignment with 2030 decarbonisation targets, says UN Climate Envoy. In addition, institutions should have interim decarbonisation targets that are “consistent” with the 2030 target, set by the Intergovernmental Panel on Climate Change , of reducing CO2 emissions by around 45% from 2010 levels.
Guidance highlights the vital role of protected areas as a conservation tool, warning against the risk of strandedassets. Investors have been reminded of the critical part they can play in helping to halt and reverse biodiversity loss through strong policies, capital allocation and portfolio stewardship processes.
A common message from Professor Jeffrey Sachs, Director of SDSN, is the critical need to articulate a clear long-term vision and not an incremental approach in order to avoid strandedassets and technology lock-in which will inhibit the energy transformation necessary to achieve the Paris Agreement goals.
But while BP’s actions and words on transition are streets ahead of most peers, it still envisages 50% of capex being focused on traditional operations by 2030. The UK firm’s updated net zero strategy was hailed by some as a blueprint for the industry, and was welcomed by major investors.
“Physical risk represents an increasingly severe risk for investors, with the escalating climate and natural capital crisis leading to elevated risks of damage from extreme weather events, supply chain disruptions, strandedassets, productivity impacts, insurance unaffordability, just transition impacts, and potential economic instability,” said Robyn (..)
From an economic perspective, fossil fuels represent future indebtedness and strandedassets. and Japan pledged $20 billion of public and private finance to help Indonesia shut coal power plants and bring forward its power sector’s peak emissions date by seven years to 2030. . They are a poor investment.
The report further warns against blending hydrogen with gas by retrofitting existing infrastructure, arguing that it will realise limited emissions reductions, while increasing the risk of strandedassets.
This stands in contrast with China’s domestic energy policy, which is prioritizing a transition to renewable energy, peak emissions before 2030 and a net-zero economy by 2060. Of course, China is not the only culprit.
The report warns that fossil fuel demand will peak as government policies to cut emissions, asset owners’ net-zero commitments and the rapid growth of clean energy technologies combine to transition the economy towards renewables. Nothing could be more clear or present than the danger of fossil fuel expansion. C goal. .
“It is essential to avoid the scenario where one claims to have carried out a comprehensive assessment, but the outcome is essentially non-informative,” he says. Currently, the time horizon for the exercise is set for 2030, however, Philipponnat notes that it is widely agreed among economists that the significant impact of climate change on GDP (..)
These companies are publicly calling for bold policy changes, like phasing out coal by 2030, ending fossil fuel financing this year and decarbonizing power systems in the G7 by 2035. . By 2030, households across G7 countries could be spending $500 less per person on electricity, natural gas and petrol.
In examining sustainability pressures and financial risk in the blue economy, WWF warned that if ocean resources continued to be extracted at current rates, “we increase the risk of ‘strandedassets’ materialising in portfolios, i.e. through assets suffering unanticipated or premature write-offs, downward revaluations or conversions to liabilities”.
The primer added: “Challenges to the actions – and inactions – of companies and their directors are starting to emerge,” citing the judgment in the Netherlands on May 26 2021, ordering Royal Dutch Shell reduce its CO2 emissions by 45% from 2019 levels by the end of 2030.”.
Anglo American sold its thermal coal portfolio in 2021, while BHP announced in 2022 that it would close its last such mine in 2030. This leaves it heavily exposed to reputational, regulatory and stranded-asset risk, leading many investors to avoid it.
Reasons are manifold but include better risk management, earlier identification of strandedassets, and the realisation that Paris Agreement goals are in jeopardy. It now aims to further halve its emissions by 2030 compared to 2020 levels – with the long-term goal of achieving net zero by 2040. “We
Danielle Fugere, President of As You Sow, told onlookers how climate change poses growing risks to banks, such as strandedassets on balance sheets, client destabilisation, and potentially higher capital requirements from regulatory bodies, as well as new opportunities. “The proposals ask banks to set 2030 targets and describe their transition plan (..)
For business, investments in fossil fuels are now far riskier because the market expects them to become strandedassets in the foreseeable future. Action in this decade towards halving emission by 2030 offers our best chance of keeping 1.5ºC within reach. Their message to world leaders is loud. Action, action, action.
Additionally, divestment campaigns and the fear of strandedassets have become each new year more pressing. It has been estimated by the Carbon Tracker Initiative that by 2030 the quasi totality will be more expensive to run than solar and wind. Renewables are also more resilient, cleaner and more popular among voters.
Risk is a central element in the decision to factor ESG principles into investing, as it can reduce future losses related to strandedassets. Likewise, it can provide an effective framework for dealing with unknowns, such as how to respond to an energy transition or resource scarcity.
The new initiative seeks to engage with companies in key sectors that are deemed to be systemically important in reversing nature and biodiversity loss by 2030.
President Xi Jinping announced in 2020 plans to target peak CO 2 emissions by 2030 and to transition toward carbon neutrality by 2060. Case Study: StrandedAssets and the Economics of a Chinese Power Plant. Strandedassets are a common theme in investment analysis of the global energy transition.
Even without carbon pricing, wind power is set to be 40% cheaper than gas-fired power in both provinces by 2030,” the report states. There is also the risk that fossil fuel infrastructure is retired before the end of its economic lifetime and becomes a strandedasset—a liability taxpayers would likely pay for.”
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