Catastrophe or Crash? Welcome to the Carbon Bubble - a podcast by Laura Flanders

When the UN’s climate chief told a meeting of coal executives this month that most of the world’s coal reserves will have to stay in the ground if we want to perpetuate life on the planet, we should have heard a shudder on Wall St. But we didn’t.

Investors keep on trading in fossil fuel as if there‘s no tomorrow but there will be for carbon, if the governments of world ever get serious about capping emissions.

It may not have happened at this month's stymied climate talks in Warsaw, but when they walked out of those talks, civil society groups pledged to get a whole lot less civil, and sooner or later governments are going to be forced to pass new regulations. The world is simply running out of the amount of greenhouse gas we can emit before we warm the climate beyond the point of no return. We may well be there already.

The same UN Climate Chief who polarized with activists, was pretty plain spoken with the coal companies. Christiana Figueres urged the energy execs to “honestly assess the financial risks of business as usual.”

Not morality, not weather, not refugees or wars, Figueres was talking about finances here, because if you’re a coal company your finances are tied up those fossil fuel reserves. They’re the core asset on your balance sheet, but only if you can burn them. If you have to leave what Figueres says needs to be about 75 percent of that coal in the ground to prevent the world from overheating that means lopping that same amount off the value of your company.

Al Gore got grief when he wrote about this in the Wall Street Journal. He’s not an economist the critics said. Figueres isn’t a banker either, but on GRITtv, on the eve of the UN’s climate talks, we talked to a man who is. John Fullerton began his career as an oil and gas banker before rising to manage global capital markets at JP Morgan.

If we’re serious about not trashing the planet, energy companies need to agree to take a write-off of $20 trillion dollars, said Fullerton. That makes the $2 trillion sub-prime mortgage melt-down seem trivial.

World markets went into a near global depression when a whole lot of mortgage backed derivatives turned out to be junk. Imagine what will happen to pension funds when BP and Exxon stocks shrink by three quarters.

The only way out is a massive shift by companies, governments and investors. We're facing what Fullerton calls a "big choice" between a climate catastrophe or a financial one. What’s needed, said Figueres, is a “deep, deep transformation”. Do you think we should leave that in the hands of the same people who've failed to take action so far?

It’s just another reason not to let our governments continue to be led around by corporations. Those civil society groups better be very serious about becoming less civil.


You can find a teaser of my conversation with Fullerton on YouTube. If you want to see the interview in full, sign up for my mailing list at GRITtv.org

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