Trudeau faces looming ‘stranded assets’ debate in confronting climate policy
Ottawa: When star NDP candidate Linda McQuaig mused during the opening days of the federal election campaign that some of Alberta’s oil wealth would have to “stay in the ground’’ in order to meet Canada’s climate change targets, the remark was treated as a scandalous revelation by her political opponents. Yet McQuaig, known for her sometimes polarizing and provocative views, arguably was simply stating 2015’s middle-of-the-road orthodoxy. From the governor of the Bank of England, to the U.S. president and the investment arms of the planet’s biggest banks, 2015 was the year that “stranded assets’’ stopped being some mythical bedtime story told by tree huggers to spook oil workers and landed in the mainstream. Mark Carney, the Canadian head of the Bank of England, attracted international attention with a Sept. 29 speech at venerable Lloyd’s of London cautioning against the grave risks to the financial system posed by a changing climate. Carney cited estimates by the Intergovernmental Panel on Climate Change that only between a fifth and a third of proven oil reserves can be burned if humanity is to avoid catastrophic climate impacts. “If that estimate is even approxi- mately correct it would render the vast majority of reserves ‘stranded’, oil, gas and coal that will be literally unburnable without expensive carbon capture technology, which itself alters fossil fuel economics,’’ said the central bank governor. President Barack Obama, making the case for his rejection of the Keystone XL pipeline barely a month later, made much the same point. “Ultimately, if we’re going to prevent large parts of this Earth from becoming not only inhospitable but uninhabitable in our lifetimes, we’re going to have to keep some fossil fuels in the ground rather than burn them and release more dangerous pollution into the sky,’’ he said. Investment houses are also issuing cautions. Last April, HSBC Global Research reported that: “Fossil fuel companies, or some of their assets, may become non-viable or ‘unburnable,’’’ under conditions of increased climate regulation and depressed prices.