There are times when governments must intercede to protect their citizens against significant threats and dangers.
Fossil fuels present a significant threat and danger to life of all forms around the world.
We know if we are to have any reasonable prospect of limiting global warming to no more than 2 degrees Celsius, about 80 per cent, perhaps even more, of known fossil fuel reserves must be left in the ground, untouched. Forget about what might lie beneath the Arctic seabed or in other unexplored spots.
When known reserves exceed what we may safely burn on a 5:1 ratio, we're staring at a Carbon Bubble of truly giant proportions. It's a "bubble" because those reserves are carried on fossil fuel company books at a notional market value that is heavily inflated. The value of a coal seam that cannot be mined is about zero. The value of a bitumen reserve that cannot be excavated is, likewise, zero. Yet on stock markets around the world the Big Fossil companies that own these reserves are trading at share prices that bear no resemblance to their true "bubble" value. There are trillions of dollars of fictitious wealth bouncing around our stock markets that are capable of inflicting massive economic disruption.
The Governor of the Bank of England, Mark Carney, knows there's a dangerous Carbon Bubble loose on the markets. He admits it. He said it. And his voice is just one of many sounding the alarum.
Big Fossil, however, will have none of it. Big Fossil, and the governments that feed off them, are in for the long haul. They dismiss the entire notion of a Carbon Bubble and assure their shareholders that people will be burning their products forever. They're backed up by the latest assessment of the International Energy Agency. The IEA warning is dire.
Curiously, Big Fossil never says that we can plunder their reserves and still live. No, they don't seriously dispute the idea that consuming their wares will pretty much doom most of mankind to extinction.
So, it's sort of like some outfit building a fireworks plant next door and hiring chronic smokers for their workforce. You got a problem. An urgent problem.
Now, if you're the government this puts you in a spot. You have to pick a side. You can either side with Big Fossil and say that those scientists, the lot of them, don't know what they're talking about and it's "Drill Baby, Drill - Burn Baby, Burn" or those scientists do know what they're talking about and we have to intervene to do what no energy company board of directors could consider doing - leaving their reserves in the ground.
There are, I suppose, plenty of ways to skin this cat. Governments could declare that a carbon bubble genuinely exists. They could decree that no more than 20 per cent of existing, known reserves can be extracted and consumed. They could fix a target date for decarbonizing our societies and economies. They could rescind subsidies to fossil energy producers and, instead, use those billions to accelerate renewable energy development and production. As a last resort, governments could nationalize Big Fossil and wind it down.
These options all sound radical and they are but only until you remember the alternative - the fireworks factory next door. In that context they're not nearly as radical as they might have first appeared.
We have to put Big Fossil out of business. They won't do it themselves, they can't. The directors and executives of a company are duty bound to maximize shareholder value and return. They are not permitted to take their foot off the gas and hit the brakes. That's simply not their job and so we have to do it for them.
Yes, such a move will cause considerable market upheaval but that will be momentary and minuscule in comparison to what will befall civilization if we do not act.
This is a protection issue, the very future of civilization at stake. That puts it right up there with threats such as total war and nuclear winter only, on this one, we haven't got another half century to work our way through the madness.
Update:
While you're pondering the scary notion of shutting down Big Fossil, consider this. A new study finds that, in the US, renewable energy is now fully cost competitive with fossil fuels. Eliminate fossil fuel subsidies and use those billions to stimulate demand for wind and solar and it should be quite feasible to make the transition.
