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    Archived pages: 266 . Archive date: 2012-12.

  • Title: Carbon Tracker Initiative
    Descriptive info: .. Carbon Tracker Initiative.. Improving the transparency of carbon embedded in equity markets.. Home.. What we do.. Carbon Bubble.. CT Markets.. South Africa.. London.. Resources.. Unburnable Carbon.. To divest or not to divest.. Stranded Assets.. Bonds.. IPOs.. Vallar plc.. Ten major coal IPOs.. Links to IPO prospectuses.. Listings to watch in 2011.. Green IPOs in China.. Submissions.. Carbon reporting.. Further reading.. Initiatives.. About Us.. Carbon Tracker in the news.. Events.. The team.. Contact.. Blog.. Blog Dec 2012.. Blog Sep 2012.. Blog July 2012.. Ground-breaking new research into the underlying carbon intensity of listed companies.. Are the world’s financial markets carrying a carbon bubble?.. What level of reserves is distributed across the world s stock exchanges?.. How much can we afford to burn to stay below 2 degrees global warming?.. Read more.. Coal Capital.. New analysis from Carbon Tracker in partnership with WWF-UK shows how the growing number of coal mining companies listing in London exposes the financial market to a significant systemic risk.. Investors tracking the FTSE AllShare Index are facing increasing efforts across the world to regulate the carbon dioxide (CO2) emissions from coal-fired power generation, most recently in Australia.. Carbon Tracker estimates that coal reserves equivalent to 44.. 56 GtCO2 are held by companies listed on the London Stock Exchange.. In March 2012, Carbon Tracker s seminal report.. The Carbon Bubble.. was Highly Commended in the City of London s Sustainability.. Awards.. This put our research in the top 4 of the 117 papers received by the London Accord in 2011, beating major investment banks.. The Farsight Award honours the best individual piece of analysis by an investment research institution that integrates traditional financial analysis with longer-term environmental social and governance (ESG) issues such as climate change, resource scarcity, corporate governance and human capital.. The Business Green Leaders Awards recognise organisations and individuals leading efforts to green business.. In its first year of activity, despite its small scale Carbon Tracker registered in the shortlist.. Not bad for such a new entity we ll be back next year to win!.. View the full 2012 shortlist.. here.. The.. is working to align the capital markets with climate change objectives through a number of workstreams:.. 1.. Assessing Systemic Climate Change Risk.. 2.. Challenging Valuation Assumptions.. 3.. Accounting for Impaired / Stranded / Sub-prime assets.. 4.. Investigating the Capital Raising process.. 5.. Exploring the contradiction between climate policy and markets.. Please.. contact us.. if you are interested in finding out more or working with us on these issues.. Unburnable carbon: Budgeting carbon in South Africa.. Our new research on coal reserves earmarked for the South African market provides a stark warning to the Government Employees Pension Fund and other investors of the carbon bubble risk  ...   in Durban reach the critical stage, we must not overlook a fundamental contradiction between the way global fossil fuel reserves are evaluated and long-term policy goals.. Al Gore: $7trillion of sub-prime carbon assets.. "We now have around 7 trillion subprime carbon assets in the global economy and their value, like the subprime mortgages, is based on an assumption that is highly questionable.. " Al Gore.. An Era of Capital Misallocation.. “Unfettered markets are not meant to solve social problems” so there is a need for better public policies, including pricing and regulatory measures, to change the perverse market incentives that drive this capital misallocation.. Leaving fossil fuels in the ground.. “at least one-half of fossil fuel assets will have to be left in the ground,”.. “We’re still pricing [companies in the extractives sector] as if they are all going to be exploited.. ”.. Latest Tweets.. Follow us on Twitter.. Articles.. Unburnable carbon in Norway.. 06 December 2012.. What would make regulators and investors really take account of GHG emissions?.. Vast pools of money still ignore sustainable investing.. 04 December 2012.. A low carbon future is the one we must all fight for.. 03 December 2012.. Where can investors who worry about climate change put their pension?.. 30 November 2012.. South Africa needs to do more to reduce its emissions.. 29 November 2012.. Climate Tracker s climate maths finds its way to COP18.. 28 November 2012.. South African investors warned against carbon bubble risk.. The carbon bubble has the potential for considerable value destruction.. 27 November 2012.. Why do we continue to dance around climate risk?.. 16 November 2012.. Cut the power of fossil fuel.. 09 November 2012.. Renewables boom poses credit risk for coal and gas power plants.. 07 November 2012.. Climate change needs action but it has a cost.. Carbon bubble is a real risk for markets.. 31 October 2012.. Business leaders warned of a carbon bubble.. After the boom in natural gas.. 29 October 2012.. The Carbon Tracker initiative is the first project of Investor Watch, a non-profit company established by its directors to align the capital markets with efforts to tackle climate change.. The board of Investor Watch includes Mark Campanale and Jeremy Leggett.. Investor Watch was founded in 2009 (Company No.. 06888857).. 2012 Carbon Tracker Initiative.. Investor Watch 2012.. All Rights Reserved.. This website is hosted using servers powered by renewable energy.. Talk to Us!.. Follow @CarbonBubble.. Add your endorsement / comment on Carbon Tracker and Investor Watch programmes / share ideas in your own networks / become a corporate member.. Contact us.. *Privacy & email subscriptions: we will only use your email to alert you to new articles published on this site.. You can unsubscribe at any time..

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  • Title: What we do | Carbon Tracker Initiative
    Descriptive info: Carbon Tracker is developing a series of workstreams to address the issues raised by its.. report:.. The resources section contains more information on the issues we are looking at, and the Carbon bubble and Coal Capital section profile our main research.. to find out more..

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  • Title: Carbon Bubble | Carbon Tracker Initiative
    Descriptive info: Unburnable Carbon – Are the world’s financial markets carrying a carbon bubble?.. In March 2012, Carbon Tracker’s seminal report ‘Unburnable Carbon was Highly Commended in the City of London’s Sustainability.. This.. award-winning.. analysis by Carbon Tracker discovers that:.. Already in 2011, the world has used over a third of its 50-year carbon budget of 886GtCO.. , leaving 565GtCO.. 2.. All of the proven reserves owned by private and public companies and governments are equivalent to 2,795 GtCO.. Fossil fuel reserves owned by the top 100 listed coal and top 100 listed oil and gas companies represent total emissions of 745GtCO.. Only 20% of the total reserves can be burned unabated, leaving up to 80% of assets technically unburnable.. (click image for larger version of map).. Distribution of reserves across exchanges.. By allocating reserves to exchanges, it is possible to build up a picture of where reserves are listed.. The map shows how the listings of coal, oil and gas reserves are distributed, indicating that capital markets  ...   of companies such as Glencore, Vallar and Vallares, and the predominance of mining companies amongst new listings – 70% in the first half of 2011.. Relevance for investors.. Asset owners typically invest large amounts in passive funds which track the market, or active funds which are benchmarked against market indices.. This means many investors are backing huge fossil fuel reserves purely as a result of the structure of the financial products they invest in.. The continued focus on short term returns perpetuates the status quo.. Regulation needed.. Carbon Tracker argues that the new.. Financial Policy Committee.. , set up to monitor risks and bubbles in the financial system, must urgently address the “carbon bubble” and ensure regulators require greater disclose on reserves and carbon emission in order to assess this material risk to financial stability.. Carbon Tracker recommends that this market failure is also considered by the.. Kay review.. into the structure of Equity markets to deliver a more long-term, transparent system.. The Unburnable Carbon Report.. News..

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  • Title: CT Markets | Carbon Tracker Initiative
    Descriptive info: Having released groundbreaking research on global fossil fuel reserves in our.. Unburnable Carbon report.. , Carbon Tracker are building on this foundation through detailed market-specific looks at the risk of the carbon bubble.. Use the drop down.. menu above to find out more..

    Original link path: /carbon-tracker-markets
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  • Title: South Africa | Carbon Tracker Initiative
    Descriptive info: This new analysis from the Carbon Tracker Initiative finds that the current coal reserves earmarked for the South African market, equivalent to 19.. 2GtCO2e, exceeds the South African Government’s ‘required by science’ carbon budget (in line with 2°C global warming) of 16.. 4GtCO2e for all sectors from 2010 to 2050.. Further coal resources:.. In addition to these known coal reserves, this report considers the scale of unproven coal resources in South Africa.. Assuming just one third of these deposits become proven reserves, this adds a further 19GtCO2e to South Africa’s domestic coal consumption.. Potential carbon budgets.. : The South African Government has committed to announce carbon budgets by October 2013.. The chart below demonstrates how these quantities compare to a range of indicative budget levels.. These budgets allocate two-thirds of emissions to the coal related sectors to indicate that not all of the budget will be allocated to coal; (recent data on GHG emissions sources in South Africa was not available).. (click image for larger version of chart).. It is evident that coal reserves earmarked for domestic use exceed even the highest carbon budget for coal-related sectors.. Therefore allocating capital to developing further resources in South Africa is not aligned to keeping to a carbon budget.. Distribution of reserves listed in  ...   noting that South Africa is not alone in facing this challenge, with other coal producing countries such as the US, Australia and Indonesia needing to face up the global carbon budget.. This was reflected in the IEA’s 2012 World Energy Outlook, which concluded that only ONE THIRD of global fossil fuel reserves can be burnt between 2012 and 2050 to give a 50% chance of achieving the 2 degree target.. Recommendations:.. This study challenges whether there is long-term value in developing further resources which are incompatible with a low carbon future for South Africa.. This transition will also create opportunities for new low carbon businesses to provide access to energy.. To remain within the South African Government’s required by science scenario, a concerted effort is required by the following stakeholder groups.. Analysts need to start factoring in carbon constraints in their valuation of companies which rely on a carbon intensive value chain.. Investors need to make sure they communicate their desire for products, such as alternative valuation models, which enable capital to be reallocated towards low carbon investment opportunities.. Regulators should put measures in place to address systemic risks such as climate change.. Accountants should consider the impact of a carbon budget on reserves when producing integrated reports.. Download the full report..

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  • Title: London | Carbon Tracker Initiative
    Descriptive info: London Stock Exchange occupied by coal.. New analysis from Carbon Tracker endorsed by WWF shows how the growing number of coal mining companies listing in London exposes the financial market to a significant systemic risk.. Investors tracking the FTSE AllShare Index are facing increasing efforts across the world to regulate the carbon dioxide (CO.. ) emissions from coal-fired power generation, most recently in Australia.. 56 GtCO.. are held by companies listed on the London Stock Exchange.. This is equivalent to 400 years of emissions from coal power stations in the UK, which currently stand at around 0.. 1Gt CO.. per annum.. Where are the reserves?.. A third of coal listed in the UK is actually located in Australia, where the government has recently agreed to deliver a carbon tax and emissions trading scheme.. So “UK” investors are potentially exposed to climate change regulatory risk in Australia.. However, Australia and Indonesia export around three-quarters of their coal production.. So, in fact, around half of the coal owned by UK-listed companies is supplying developing economies in China, Russia, India and South Africa.. A financial system fit for purpose.. Many asset owners and fund managers representing $20trillion of capital reiterated their.. call.. for the Durban climate negotiations at the end of November to deliver a 2°C policy framework.. Now is the time for them to also ask financial regulators to deliver a 2°C degree capital market system.. The FSA needs to address the systemic risks of reserves concentrating on the London Stock Exchange and monitor the levels of fossil  ...   Bank of England.. Comments on Coal Captial.. James Cameron, a Member of the Prime Minister’s Business Advisory Group, said:.. “Counter intuitively, investors continue to pour cash into unsustainable high carbon assets without understanding or being able to manage the risks associated with these investments, such as climate change, local pollution, fossil fuel price volatility, political risk and catastrophes such as Deepwater Horizon.. This poses significant strategic challenges for the future prosperity of Britain that just can‟t be ignored.. ”.. David Nussbaum, Chief Executive of WWF-UK, said:.. "There are significant long term financial and environmental risks associated with high carbon investments, and policymakers and regulators need a thorough appreciation of these.. It's clear that we cannot burn all the fossil fuels currently listed as assets on the world's financial markets without seriously impacting the value of other listed assets - which would affect the future pensions on which we'll all depend.. Taking the high carbon risks seriously should also assist us in the transition towards low carbon investments like renewables.. ".. Paul Simpson, CEO of the Carbon Disclosure Project, said.. “Overexposure to high carbon companies presents significant risks to investment portfolios as governments act to reduce greenhouse gas emissions and avoid dangerous climate change.. Whilst the current economic woes of Europe present a short-term headache if we are to avoid a much larger hangover from our high carbon economy then regulators, stock exchanges and long-term investors must analyse the fossil fuel reserves on company balance sheets in order to better understand and reduce risk from high carbon investments..

    Original link path: /coalcapital
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  • Title: Resources | Carbon Tracker Initiative
    Descriptive info: Please use the drop down.. RESOURCES.. menu above to find out more about the issues we work on, and links to relevant publications and initiatives from other organisations..

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  • Title: Unburnable Carbon | Carbon Tracker Initiative
    Descriptive info: Climate scientists (.. Meinhausen et al 2009.. ) have calculated that if 886 Gt CO.. is released globally during the period 2000 – 2050, there is a 20% chance global warming will exceed 2°C.. In 2011, we have already burnt over one third of this 886 Gt CO.. budget, and the known fossil fuel reserves easily exceed the remaining allowance.. The reserves beyond this limit are what we refer to as.. unburnable carbon.. This concept has now been adopted by others, not least the IEA which included the following reference to the carbon budget concept in its World Energy Outlook (Nov 2011).. “What matters for a given climate goal is not the particular choice of policy measures, nor the investment cost – nor, even the specific emissions profile (at least in the absence of major overshooting, which could lead to the kind of feedback effects discussed in Box 6.. 1) – but the cumulative level of emissions over a certain period.. One way of  ...   give a 75% chance of keeping the global average temperature increase to 2°C or less (Meinshausen et al.. , 2009).. In the 450 Scenario, this budget is exceeded by 2035.. Reducing the probability of success to 50% increases the budget to 1 440 Gt.. Since a total of 264 Gt of emissions have already been emitted between 2000 and 2009, 1 176 Gt more can be emitted from2010 to 2049.. The implications for global energy markets of this budget are profound, as it implies that less than half of the remaining proven fossil-fuel reserves can be used over the next 40 years (Figure 6.. 17).. More of the reserves could be used without exceeding the emissions budget if CCS technology becomes available.. However, CCS technology has not yet been proven at commercial scale and the level of commitment to demonstration plants leaves doubts about how fast this can be achieved.. Excerpt from the World Energy Outlook 2011, IEA.. Available to purchase at:.. http://www.. worldenergyoutlook.. org/..

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  • Title: To divest or not to divest | Carbon Tracker Initiative
    Descriptive info: 350.. org have started the “.. Do the math.. ” tour, taking to the road presumably emboldened and relieved by the US Presidential election result.. We’d like to wish them luck in bringing the new math(s) of climate change to a United States population which still has fresh images of Super storm Sandy bringing extreme weather events to their shores.. The Mayor of New York has made it clear that this shows the impacts of climate change, or as.. Businessweek.. kindly surmised: “Its global warming, stupid”.. The math tour draws on Carbon Tracker’s comparison of coal, oil and gas reserves with carbon budgets.. We in turn used scenario modelling and methodologies developed by Meinhausen et al.. at the.. Potsdam Institute.. This shows the potential of linking scientific research with climate policy and financial markets, and then on to civil society movements.. However it is only one potential strand of a network of interactions.. The translation of the Unburnable Carbon analysis into a divestment from coal campaign is only one interpretation of the numbers.. It will work with people who hold coal shares, who are convinced by Bill McKibben’s moral argument, and are not restricted in  ...   process, or indeed are not mandated to make ethical investment choices, they need an alternative way of approaching the problem.. The majority of institutional investors are likely to fall into these categories, and will therefore need to see a financial case for altering their exposure and be proactive in understanding and managing the risks.. Carbon Tracker has therefore come up with some suggestions for investors who want to consider the issues raised by the numbers, but don’t have divestment on the table as an option:.. Request sell-side research which analyses the valuation implications for fossil-fuel based companies of constraining carbon-intensive revenues.. Read more.. Engage with extractive companies on their capital expenditure (CAPEX) strategies and challenge incompatibility with the carbon budget to avoid stranded assets.. Push for ratings agencies to factor climate risk into ratings methodologies in a systematic way.. Engage with regulators to require disclosure of the carbon potential of reserves and monitoring of this systemic risk.. For those that are currently tied into the system and its information flows – they need to start challenging assumptions and changing the system.. if you would like to discuss how to get involved in some of these options..

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  • Title: Stranded Assets | Carbon Tracker Initiative
    Descriptive info: Carbon Tracker is leading some of the thinking on.. Stranded Assets,.. as recognised by the Generation Investment Management.. White Paper.. Our.. carbon bubble analysis.. has prompted investors to start asking who the winners and losers might be in future climate change scenarios.. As people start to try and identify potential stranded assets, here as some suggestions where they might be found.. First it is useful to consider the potential futures we could experience.. If global warming is limited to 2 degrees, then this essentially means some fossil fuels have to stay in the ground, and some related infrastructure may become redundant.. On the other hand if there is no limit to how much fossil fuel we burn unabated and we head towards 6 degrees of warming then vulnerable sectors will be affected.. Agriculture, infrastructure, property and insurance sectors will suffer across asset classes.. This is the.. contradiction.. Lord Stern observed in his analysis during Durban.. So what are the examples of stranded assets? Well the most carbon intensive fossil fuels are clearly exposed to a low carbon future.. If you look at US coal mining companies their product has been superseded by cheaper natural gas.. As a result they are now looking to export markets.. Dirtier fuels are not always tackled directly on a carbon basis.. The US EPA has raised its Mercury emissions standards increasing the costs of producing electricity from coal.. These changing market factors have left the brand new.. Spiritwood.. lignite plant in Minnesota mothballed before it even started supplying electricity.. There have been a few bets on when solar grid parity will be achieved in different countries.. Most commentators agree.. China.. could see this milestone by 2015.. Some.. US.. cities are already there, with more on the way.. Canadian tarsands are a vast resource at the carbon intensive end of the oil spectrum.. Some US states have already introduced restrictions on this fuel, and the.. European Fuel Quality  ...   can take 18 years.. Now lets consider what might happen in a warming world.. Adaptation continues to be mitigation’s poor relation, and business doesn’t just produce greenhouse gases, it’s a two way street.. Assets can be impacted by physical climate change, resulting in literal strandings, not just loss of economic viability.. It is becoming clear how reliant many industries are on water, and investors have started to consider this a real risk.. Australia has seen increasingly dry years in the Murray-Darling basin.. Agricultural communities.. have objected to the latest water management plan which aims to reduce the amount of water taken from the river system.. India.. has already demonstrated it has the capacity to turn coal plants into temporary stranded assets due to simultaneously experiencing water shortages and floods in different part of the country.. The closure of a water supply canal and railway supply routes left power stations short of water and coal.. The increasing frequency of severe weather events will only put greater pressure on the insurance industry.. The austerity measures put in place by government agencies are threatening adequate investment in.. flood defences.. , with warnings in the UK that there is a growing spending gap.. Climate change can also come back to haunt the petroleum industry.. Alaskan and.. Russian.. oil and gas infrastructure has been built on permafrost in northern regions.. If this melts due to warming, the industry will no longer have a solid surface to work from.. So just to recap, 21st Century stranded assets could result due to health concerns, particulates standards, too much water, not enough water, water changing state, community opposition, technology developments, to give a few examples.. Oh and obviously there is the carbon price and a potential global climate deal, but even without those in place, it seems many parts of the world are already feeling the pinch.. So which of the assets you have an interest in may become stranded?..

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  • Title: Bonds | Carbon Tracker Initiative
    Descriptive info: Having started our research in equities we are now looking at other assets classes, with bonds being a particular area of interest.. Bonds are given credit ratings which reflect the probability of default (ie the borrower will not be able to make its payments).. Credit ratings are relative rather than absolute and the market is dominated by three main ratings agencies (Standard Poors, Moody s and Fitch).. The rating determines the interest rates and conditions attached to the lending.. For a full explanation of ratings see.. Corporate bonds are debt facilities which allow the companies to borrow capital over a fixed period in return for paying interest (coupons).. We are researching bonds and sectors where the company s ability to repay and service the debt is reliant on continuing to exploit fossil fuel reserves ie there is a still sufficient market for fuels which emit  ...   reserves as material assets for the companies.. For example three of the four main criteria oil majors are assessed on are:.. - their assets (ie their reserves).. - the degree of leverage against those assets.. - the amount they are reinvesting in replacing reserves.. See Moody s Sector.. methodology.. for more detail.. There is also research ongoing at present into how to integrate ESG factors into Sovereign bonds issued by states.. This presents a different dynamic with regard to our research as the majority of oil rich states do not need to borrow significantly in this way.. On the flip side of this it means that those states that are heavily in debt are also the most exposed to commodity price rises as they do not have their own resources.. Carbon Tracker is on the advisory group of a.. UNEPFI.. Project looking at these issues..

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    Archived pages: 266