Quotation van der Ploeg, Frederick, Rezai, Armon. 2020. Stranded Assets in the Transition to a Carbon-Free Economy. Annual Review of Environment and Resources. 12 281-298.


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Abstract

Assets in the fossil fuel industries are at risk of losing market value due to unanticipated breakthroughs in renewable technology and governments stepping up climate policies in light of the Paris commitments to limit global warming to 1.5 or 2°C. Stranded assets arise due to uncertainty about the future timing of these two types of events and substantial intertemporal and intersectoral investment adjustment costs. Stranding of assets mostly affects the 20 biggest oil, gas, and coal companies who have been responsible for at least one-third of global warming since 1965, but it also affects carbon-intensive industries such as steel, aluminum, cement, plastics, and greenhouse horticulture. A disorderly transition to the carbon-free economy will lead to stranded assets and legal claims. Institutional investors should be aware of these financial risks. A broader definition of stranded assets also includes countries reliant on fossil fuel exports and workers with technology-specific skills.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Annual Review of Environment and Resources
Citation Index SCI
Language English
Title Stranded Assets in the Transition to a Carbon-Free Economy
Volume 12
Year 2020
Page from 281
Page to 298
Reviewed? Y
DOI https://doi.org/10.1146/annurev-resource-110519-040938
Open Access N

Associations

People
Rezai, Armon (Details)
External
van der Ploeg, Frederick (University of Oxford, United Kingdom)
Organization
Competence Center for Sustainability Transformation and Responsibility WE (Details)
Institute for Ecological Economics IN (Details)
Socioeconomics of Work Group AB (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
2928 Environmental economics (Details)
5325 Political economics (Details)
5334 Political economic policy (Details)
5335 Political economic theory (Details)
5341 Economic policy (Details)
5353 Environmental economics (Details)
5924 Environmental economics (Details)
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