That’s over at P3. But I’ve seen it elsewhere. The idea is that because we’ll need to keep unburnt oil in the ground to hit (or rather, to not hit) a 2 oC commitment, a pile of oil companies are wildly overvalued, leading to… well, who cares what it leads to, because it doesn’t matter.
As soon as the “market” expects that new regulation will seriously devalue an asset, its price drops. Bubbles only arise if the “market” is misinformed. The “market” is by no means infallible when it comes to pricing risk, but an expectation of “not much climate policy any time soon” strikes me entirely realistic
which is pretty well what I was going to say, so I won’t bother re-say it (note, BTW, that I’m of course not saying that I think sticking within 2 oC wouldn’t be a good idea. I think it would be an excellent idea. I’m just dubious about its plausibility). He continues with some econ-type stuff about how even if it were true it wouldn’t have the effects claimed, which seems plausible too, but I’m less interested in that. The Economist says about the same.
P3′s writeup says:
There’s a huge amount of evidence that… mainline financial analysts around the world are taking the argument on-board, and in a big way.
That’s hard to make sense of. If true, why aren’t the stock prices of oil companies tumbling? But I boldly plough on, to the report itself (Unburnable Carbon 2013: Wasted capital and stranded assets). And don’t find much. Perhaps I missed it; its quite long and I only skimmed it.