S&P: COAL STILL CORNERSTONE OF ECONOMY, BUT GLOBAL EFFORTS PROMISING
International ratings company Standard & Poor’s urged that coal, the most polluting source of power generation, remains a cornerstone of the global economy, while pledging efforts of world powers, which are likely to slow the pace of coal demand gro
International ratings company Standard & Poor’s urged that coal, the most polluting source of power generation, remains a cornerstone of the global economy, while pledging efforts of world powers, which are likely to slow the pace of coal demand growth over the medium term, amid ongoing COP21 talks in Paris focusing on climate change agenda.
Standard & Poor’s underlined this particular risk, while “earth is warmer now than it has been for over 90 percent of its 4.6 billion year history, and there is no sign of any slowdown” and called on for global effort to reverse global warming.
According to the company’s special report entitled “Climate Risk: Rising Tides Raise The Stakes”, carbon constraints remains a substantial energy source, accounting for 41 percent of global carbon emissions, delivering 30 percent of energy and 40 percent of power generation worldwide.
However, with efforts of the EU, the U.S., and China, a significant decline in coal production and consumption worldwide is becoming a much more realistic concept, applauded the report.
As carbon risks escalate, investors seek tools to manage their impact and companies exposed to the risk are already boosting efforts to assure it does not affect their future profitability, commented Julia Kochetygova, head of sustainability indices at S&P Dow Jones Indices.
“For investors looking to protect their assets, the important question is becoming whether the transition to a low-carbon economy will be orderly or disruptive. The longer the world waits to curb emissions, the higher the eventual cost will be” Kochetygova urged.
Risk of "billions of dollars in loss"
“Global warming is leading to higher sea levels--a reflection of melting glaciers in Arctic regions, as well as the greater volume of warmer water globally” she added.
Thus, the risks could lead to billions of dollars in losses over the next few decades if nothing is done, Kochetygova warned, reiterating risk of melting glaciers in Arctic regions and the greater volume of warmer water globally.
“Depending on the level and pace of the rising seas, coast-hugging highways, seawalls, harbors, nearby water, sewage, and power facilities, and other seaside infrastructure--in addition to millions of homes--could see billions of dollars in losses over the next few decades if nothing is done” she said.
As the S&P report emphasize, expectations are high that the UN Climate Change Conference in Paris from Nov. 30-Dec. 11 “will produce a global treaty”.
Time will show if sovereigns, companies show the determination to tackle the risks, as “climate resilience can protect ratings from sea-level rise and threats to coastal infrastructure” as S&P said.