Climate Change – Stranded Assets New Publication: ‘From Riches to Rags?’

After years of stagnation, the successful climate conferences of Paris in 2015 and Marrakesh in 2016 have revived global climate governance. The agreements reached, in particular the global commitment to limiting the temperature increase to 1.5-2 degrees Celsius, will – provided that they are fully implemented – have strong implications for the fossil fuel sector. The era of fossil fuels such as oil, gas and coal as a source of energy will foreseeably (have to) end, more rapidly and comprehensively than many people currently realise.

Against this background, the sector programme Extractives and Development published the study From Riches to Rags? - Stranded Assets and the Governance Implications for the Fossil Fuel Sector (External link), which looks into the subject of stranded assets in the fossil fuel sector. Stranded assets are assets that lose value, or generate new liabilities, before they reach the end of their (planned) economic life. In this paper, assets primarily refer to fossil fuel resources (oil, gas and coal) that need to stay in the ground because otherwise the 2-degree target would be jeopardised. The paper addresses the strong implications this might have for developing countries.

The climate challenge can only be tackled by embarking on a comprehensive transformation towards a decarbonised global economy as quickly as possible. The fossil fuel sector can contribute to this process. The discussion paper therefore proposes entry points for international cooperation.

For further information, please reach out to a member of the GIZ-team (External link).