This article is part of the special report The World in 2050.
There’s a cost to becoming climate neutral — it will mean having to abandon trillions of euros in energy assets that will no longer be needed in a greener world.
The technical term is a “stranded asset” and it encompasses all the infrastructure needed to dig out, process and ship fossil fuels, as well as the vast coal, oil and gas reserves left forever underground.
The assets that will have to be disused or repurposed if Europe is to meet its goal of becoming carbon neutral by 2050 include pipelines, pumping stations, oil rigs, coal mines, gas stations, power plants and even buildings that can’t be upgraded to meet modern energy standards.
If the world takes rapid action under the Paris Agreement to limit global warming to 2 degrees, the total stranded assets’ value would be about $10 trillion, according to the International Renewable Energy Agency. If it acts more slowly, under a more conservative business-as-usual approach, the cost will be far greater — roughly doubling as companies build new assets they will eventually have to abandon.
Those costs are becoming real very quickly. This week, BP announced it is writing off up to $17.5 billion in assets thanks both to the coronavirus slump and to the shift away from fossil fuels.
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