Immense quantities of American, Russian and Chinese coal reserves, as well as Middle Eastern oil and gas reserves will have to remain in the ground – buried and unburned – if the earth is to avoid catastrophic climate change, according to recent research report published in the journal Nature.
We’ve known since last year, when the IPCC Fifth Assessment Report introduced the term “carbon budget,” that there is a limit to the amount of CO2 that can be emitted while still avoiding global warming above 2 degrees Celsius (the figure scientists agree is the most the planet can warm to prevent catastrophic consequences). The new research now estimates that just over 30% of all oil reserves, about 50% of all natural gas reserves, and more than 80% of all coal reserves that will have to remain in the ground to avoid warming above 2 degrees C.
What’s really interesting is that the new research details just where those unburnable fossil fuel assets are located. Constructing a model using the known location, nature, and quantities of the world’s existing oil, gas and coal reserves, researchers were able to provide details concerning the amounts and locations of these assets:
The report highlights several important – and potentially extremely difficult – geopolitical and economic implications. Remaining buried and unburned turns these otherwise-available reserves into “stranded assets.” The oil, gas, and coal companies (and often, the governments) that own the rights to the reserves would be unable to exploit them. The effective devaluation of the reserves (to $0) would likely have far-reaching consequences.
The great unanswered question of course is: what would it take to actually abandon all those reserves? A binding international agreement? Or could market forces bring about the result, once the true costs of exploiting the reserves are taken into consideration? We’ve taken note of this issue before (here). We observed that when the impacts of climate change are property accounted for, the true value of the “unburnable” fossil fuels is negligible. It remains to be seen whether the planet or the drive to exploit resources will prevail, but this issue will certainly be front and center at the Paris climate talks later this year.