Six degrees of capitalization

James Leaton and Mark Campanale

Despite tightening climate regulations, the capital markets are becoming more fossil fuel intense, not less, with large fossil fuel companies raising big money on the world’s leading stock exchanges during the decade from 2000. The amount of carbon in the world’s proven fossil fuel stocks is some 2,795 gigatons – five times more than climate scientists say we can safely burn. Yet the owners of those stocks are already borrowing money and paying dividends on the basis of the 2,795 figure. Carbon Tracker was set up in 2010 to produce the data that uncovered this situation.

Mark CampanaleThree years earlier a paper by Nick Robins and Mark Campanale for the Quality of Life Commission’s website suggested that the markets had already financed more coal and oil than could safely be burned. But to turn this theory into robust data required analysis. The first task was to evaluate the balance sheets of some 200 of the world’s largest listed coal, gas and oil companies to look at their reserves – and then convert this data into CO2 emissions potential. This was an obvious piece of data analysis, but it hadn’t been done before.

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