New fossil fuel developments are risky because the world already produces more fossil fuels than it can safely burn. Stranded assets are capital stuck in investments that no one wants to buy — which can happen suddenly, as on the September 15, 2008, when the sudden collapse of the firm Lehman Brothers triggered a market panic that tipped the global financial into a financial crisis. Policymakers will be under pressure to respond to a financial crisis at the same time they are deploying more resources to contain a worsening climate crisis and related disasters, pandemics or water shortages. We just want prudential regulators to use the system consistently,” by treating climate risk as they would other forms of risk. Instead of treating climate change as political, “we need them to value and provide credibility to the economic and financial arguments for getting the U.S. off fossil fuel.

Source: New York Times October 27, 2021 21:54 UTC