PARIS — Falling fossil fuel demand coupled with mounting risk for investors could slash the value of oil, gas and coal reserves by two thirds, sending shock waves through the global economy, energy an
alysts warned Thursday.
"Terminal decline starts when demand peaks," lead author Kingsmill Bond, Carbon Tracker's new energy strategist, told AFP. Before the coronavirus outbreak, many analysts predicted global demand for oil and gas would peak in the mid-2020s, while the International Energy Agency forecast a plateau towards the end of the decade for oil.
"By then, renewable energy technologies will be large enough to supply all the growth in energy demand." "Now is the time to plan an orderly wind-down of fossil fuel assets and manage the impact of the global economy rather than try to sustain the unsustainable," Bond said. The size of the fossil fuel economy -- about $10 trillion in supply infrastructure, and $22 trillion in demand infrastructure -- means its rapid decline could pose a threat to financial stability, the report concluded.
Carbon Tracker calculated that if demand falls by 2 percent a year -- in line with the Paris Agreement goal of capping global warming below 2 degrees Celsius -- those future profits would collapse by nearly two-thirds to $14 trillion.
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