Al Gore

Former US vice-president Al Gore has called on the investment community to “divest from carbon-intensive fossil fuel assets”.

Mr Gore’s comments come on the same day as a report on global emissions of carbon dioxide indicating the first signs of a “permanent slowdown” in the rate of increase.

The Financial Times reports that Gore, who is now chairman of Generation Investment Management, fears carbon assets will become “stranded”, a term used to describe assets that lose economic value well ahead of their anticipated useful life – whether as a result of changes in legislation, regulation, market forces, disruptive innovation, societal norms or environmental shocks.

He is backing a report, Stranded Carbon Assets, and said that, “although the scientific community overwhelmingly agrees that climate change is happening, investors have so far been slow to appreciate the implications for the carbon-intensive assets within their portfolios.”
Al Gore
According to the World Resources Institute, 1,199 new coal-fired power plants are being proposed globally, yet the coal industry is one of the most exposed to becoming stranded.

Meanwhile another new report, Trends in global CO2 emissions, produced annually by the Netherlands Environment Assessment Agency and the European Commission’s Joint Research Centre on CO2 found that emissions in 2012 increased at less than half the average over the past decade.

Key factors in the explanation for this included the shift to shale gas for energy in the US while China increased its use of hydropower by 23 per cent.

The same report finds that emissions of carbon dioxide reached a new record in 2012 of 34.5bn tonnes, but the rate of increase in CO2 was 1.4 per cent, despite the global economy growing by 3.5 per cent.

This decoupling of emissions from economic growth is said to be down to the use of less fossil fuels, more renewable energy and increased energy savings.

Emissions from China increased by 3 per cent but this represents a significant slowdown compared to annual increases of around 10 per cent over the past decade.

The UK had the biggest rise in coal use since 2006, up 24 per cent in a year. A similar rise was seen in Spain, with France and Germany also showing increases. Despite Poland and the Czech Republic reduced their use by 4 and 8 per cent respectively.

The report forecasts that if the push for shale continues in the US, if China sticks to its published plans and if renewables continue to grow – particularly in Europe – global emissions might slow down permanently.

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