Updated November 26, 2015 19:16:56 A former investment banker turned climate change adviser says the world risks building trillions of dollars worth of uneconomic fossil fuel projects over the next 10 years because of measures to limit global warming. Research analyst Mark Fulton is the lead author of a report by London based environmental think tank Carbon Tracker, which has warned there are $US2.2 trillion in potentially unviable coal, gas and oil projects around the globe. The report said the US had the greatest exposure to the fossil fuels industry with $US412 billion in unnecessary future projects while Australia's potentially uneconomic developments were worth $US103 billion. Mr Fulton came up with the $2.2 trillion figure by conducting stress tests on planned fossil fuel projects with a scenario where global warming is limited to 2 degrees Celsius, the threshold above which the Intergovernmental Panel on Climate Change (IPCC) estimated that global warming becomes serious and extreme. "It's about $US1.8 trillion for oil and gas and a couple of hundred billion for coal. Generally these are just the numbers that the industry is estimating to get these things up and going at a reasonable return; our return happens to be at 15 per cent," Mr Fulton told The World Today. Mr Fulton said Australia risked an oversupply of liquefied natural gas projects and he singled out planned coal mines in Queensland's Galilee Basin as a waste of money. "It's the projects like the Galilee Basin, the Carmichael mine, they are just not needed economically in our view," Mr Fulton said. "There's just so much coal out there, that does Australia once again, all these companies, want to bet on a highly volatile, highly difficult-to-read market and produce the world's largest coal mine, which by the way, even if I'm just an economist now, all you're doing is risking a collapse in the coal price." Last month, a United Nations report found the private sector was increasing its investment in less polluting industries and it called on governments and policy makers to do the same. Mr Fulton has been an UN climate change adviser and was a senior economist and market strategist at investment banks, Citigroup and Deutsche Bank. The Minerals Council of Australia disagrees with the report's assertion that $US100 billion worth of future coal, oil and gas projects are unviable. The council's executive director of coal Greg Evans said demand for planned coal projects in Queensland's Galilee Basin would remain strong over the next few decades. "Our major customers are those customers in Asia where economic expansion will be taking place," he said. "India, South-East Asia, and indeed, North Asia. So they will require all the energy they can get." Mr Evans said the International Energy Agency was forecasting that Australian coal exports are likely to increase by 37 per cent by 2040. Next week, the United Nation's climate change conference starts in Paris with the aim of getting the world to sign up to a new agreement to limit global warming. Mr Fulton said it was time for investors to reduce their exposure to fossil fuel projects. "I look at this in terms of supply demand and economic break-even. I can only tell you what the data says, so I'm not an advocate," he said. "I happen to have run a two degree stress test because I think that is what companies should be looking at. "If you're a company you've got to see the down side here, you've got to look at what the downside might be." Topics: coal, climate-change, oil-and-gas, business-economics-and-finance, pollution, australia First posted November 25, 2015 22:26:47
Mark ##eson , a former investment banker turned climate change activist , claims that the world risks losing trillions of dollars ’ worth of uneconomic fossil fuel projects over the next ten years because of measures to limit global warming . Fulton is the lead author of a report by London - based environmental think tank Carbon Tracker , which has warned there are $ 2.2tn in potentially unviable coal , gas and oil projects globally . The report argues that the US has the greatest risk to the fossil fuels industry with $ 200 in unnecessary future projects while Australia 's potentially uneconomic developments are worth $ 103bn .