This could get awkward. We need to stop burning fossil fuels to avoid the risk of dangerous climate change. But limiting the amount we can burn will take a chunk out of the global economy.
A non-binding international agreement is in place to try to limit global warming to 2 掳C. If it is to be honoured, we can only burn about a quarter of the planet鈥檚 existing fossil fuel reserves.
A from the says this would slash the value of the biggest energy companies by between 40 and 60 per cent, because they have invested billions of dollars in exploring untapped resources.
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In effect, investors have created a 鈥�carbon bubble鈥� by ploughing money into fossil fuel reserves that should not be exploited.
The economic damage could be minimised if any climate agreement was phased in gradually, says of Anglia Ruskin University in Cambridge, UK. 鈥淭he problem is we鈥檙e running out of time,鈥� he says, so such a plan needs to be agreed soon. If an emissions limit was imposed suddenly, Jones says it would spark a global economic crisis.
Oil-exporting countries have long been aware of this problem. Since the 1990s, states like Saudi Arabia have been arguing that , as they will not be able to sell their valuable fossil fuel reserves.
