Carbon bubble

The term "carbon bubble" arose in the early 21st century from the increasing awareness of the impact of fossil fuel combustion on global temperatures. "Carbon" refers to the hydrocarbon contained in fossil fuels, while "bubble" refers to economic bubbles, situations where the prices of asset are much higher than the intrinsic value. The term was coined by the Carbon Tracker Initiative which published key reports in July 2011 and April 2013.{{Cite web|url=http://www.carbontracker.org/carbonbubble|archiveurl=https://web.archive.org/web/20130818040622/http://www.carbontracker.org/carbonbubble|url-status=dead|title=Unburnable Carbon – Are the world's financial markets carrying a carbon bubble?|archivedate=18 August 2013}}{{Cite web|url=http://www.carbontracker.org/wastedcapital|archiveurl=https://web.archive.org/web/20130730162257/http://www.carbontracker.org/wastedcapital|url-status=dead|title=Unburnable carbon 2013: Wasted capital and stranded assets|archivedate=30 July 2013}} and it was further popularised in the New Scientist magazine in October 2011.{{cite web |url=https://www.newscientist.com/article/dn21031-carbon-bubble-could-threaten-markets-maybe/ |title=Carbon Bubble Could Threaten Markets |date=11 October 2011 |publisher=New Scientist |access-date=10 July 2015 |archive-date=13 April 2016 |archive-url=https://web.archive.org/web/20160413053410/https://www.newscientist.com/article/dn21031-carbon-bubble-could-threaten-markets-maybe/ |url-status=live }}

A widely shared article by Bill McKibben was published in Rolling Stone magazine in July 2012, bringing the idea to the attention of a popular audience.{{cite web |url=https://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719 |title=Global Warming's Terrifying New Math |date=11 October 2011 |publisher=Rolling Stone |access-date=22 June 2017 |archive-date=7 March 2013 |archive-url=https://web.archive.org/web/20130307212707/http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719 |url-status=live }}

These were followed later in 2013 by a report from the Demos think tank.{{cite report | url=http://www.demos.org/news/beware-carbon-bubble | title=Beware of the Carbon Bubble | last1=McElwee | first1=Sean | last2=Daly | first2=Lew | publisher=Demos | date=23 December 2013 | access-date=6 November 2015 | archive-date=8 September 2015 | archive-url=https://web.archive.org/web/20150908074653/http://www.demos.org/news/beware-carbon-bubble | url-status=live }}

Carbon budgets are upper limits on the amount of carbon dioxide emissions that can be released without increasing the global average temperature past a certain point. In 2011, the Carbon Tracker Initiative calculated that at that point the world could only burn 20% of its carbon-based fuel reserves if it wished to stay below a 2°C increase that has been agreed upon by the UNFCCC members.{{Cite web|title=Unburnable Carbon – Are the world's financial markets carrying a carbon bubble?|url=http://www.carbontracker.org/carbonbubble|url-status=dead|archiveurl=https://web.archive.org/web/20130818040622/http://www.carbontracker.org/carbonbubble|archivedate=18 August 2013}} This meant that the remaining 80% could not be burned, and so what governments and investors were treating as low-risk assets were actually very likely to become stranded assets. This could have serious economic implications, as the London Stock Exchange, Sao Paolo Stock Exchange, and Moscow Exchange (among others) had an estimated 20-30% of their market capitalization connected to fossil fuels. In the case of London, for example, the fossil fuel reserves listed in the exchange were ten times its carbon budget from 2011 to 2050. As those assets become "unburnable" and therefore lose most of their value (or became liabilities), this will put the strength of the British economy at stake. This is because the viability of these businesses depends on their ability to extract and sell carbon, rather than past emission-generating operations.

A newer analysis has found, global emissions from fossil fuel reserves would exceed carbon budget by more than seven times.{{Cite web |last=Milman |first=Oliver |date=2022-09-19 |title=Burning world's fossil fuel reserves could emit 3.5tn tons of greenhouse gas |url=https://www.theguardian.com/environment/2022/sep/19/world-fossil-fuel-reserve-greenhouse-gas-emissions |access-date=2022-09-19 |website=The Guardian |language=en}} Additionally, companies are continuing to gather more reserves as well as explore unproven reserves, meaning that there is an even larger hidden amount of reserves hidden within capital markets, further increasing the size of the carbon bubble.

Currently, reduction of a company's reserves is seen negatively by investors, even when it is the correct thing in the long-term interests of the company. For example, when Shell reduced its reserves by 20% in January 2004, its share price dropped by 10% in a week.

Author Bill McKibben has estimated that to sustain human life in the world, up to US$20 trillion worth of fossil fuel reserves will need to remain in the ground.{{cite web |url=http://www.tomdispatch.com/archive/175499/ |title=Why the Energy-Industrial Elite Has It In for the Planet |author=Bill McKibben |date=7 February 2012 |publisher=TomDispatch}} In 2021, an analysis has found 90% of coal and 60% of oil and gas reserves could not be extracted if there was to be even a 50% chance of keeping global heating below 1.5C.{{Cite web|last=Carrington|first=Damian|date=2021-09-08|title=How much of the world's oil needs to stay in the ground?|url=https://www.theguardian.com/environment/2021/sep/08/climate-crisis-fossil-fuels-ground|url-status=live|access-date=2021-09-09|website=The Guardian|language=en|archive-url=https://web.archive.org/web/20210908153408/https://www.theguardian.com/environment/2021/sep/08/climate-crisis-fossil-fuels-ground |archive-date=8 September 2021 }} The Stern report in 2006 stated that the benefits of strong, early action to decrease the use of oil, coal and gas considerably outweigh the costs. Fossil fuel contributors, the building industry, and land use practices ignore the responsibility of the external costs and ignore the polluter pays principle according to which climate change costs will be paid by historical climate polluters.{{Cite web|last=Stern|first=Nicholas|date=2006|title=Stern Review final report|url=https://webarchive.nationalarchives.gov.uk/ukgwa/20100407172811/http://www.hm-treasury.gov.uk/stern_review_report.htm|url-status=live|access-date=2022-01-01|website=webarchive.nationalarchives.gov.uk|archive-url=https://web.archive.org/web/20210807060108/https://webarchive.nationalarchives.gov.uk/ukgwa/20100407172811/http://www.hm-treasury.gov.uk/stern_review_report.htm |archive-date=7 August 2021 }}

In 2015, Mark Carney, the Governor of the Bank of England, in his lecture to Lloyd's of London, warned that limiting global warming to 2°C appears to require that the "vast majority" of fossil fuel reserves be "stranded assets", or "literally unburnable without expensive carbon-capture technology", resulting in "potentially huge" exposure to investors in that sector.{{cite report|url=http://www.bankofengland.co.uk/publications/Pages/speeches/2015/844.aspx|title=Breaking the tragedy of the horizon - climate change and financial stability|author=Mark Carney|date=29 September 2015|publisher=Bank of England|access-date=9 November 2015|archive-url=https://web.archive.org/web/20160118013725/http://www.bankofengland.co.uk/publications/Pages/speeches/2015/844.aspx|archive-date=18 January 2016|url-status=dead}}

File:Klimademo Bern vor Schweizerischer Nationalbank.jpg to divest from fossil fuels (2019).]]A planned and orderly transition away from dependence on fossil fuels could prevent a disruptive "bursting of the carbon bubble". A number of developments are supporting such a transition.

A detailed academic study of the consequences for the producers of the various hydrocarbon fuels concluded in early 2015 that a third of global oil reserves, half of gas reserves and over 80% of current coal reserves should remain underground from 2010 to 2050 in order to meet the target of no more than a 2 °C rise in average global temperature. Hence continued exploration or development of reserves would be extraneous to needs. To meet the 2 °C target, strong measures would be needed to suppress demand, such as a substantial carbon tax leaving a lower price for the producers from a smaller market. The impact on producers would vary widely depending on the cost of production in their areas of operation. For example, the impact in Canada would be far larger than in the United States. Open-pit mining of bituminous sands in Canada would soon drop to negligible levels after 2020 in all scenarios considered because it is considerably less economic than other methods of production.{{cite web |url = http://www.cbc.ca/news/politics/climate-change-study-says-most-of-canada-s-oil-reserves-should-be-left-underground-1.2893013 |title = Climate change study says most of Canada's oil reserves should be left underground |last1 = Dyer |first1 = Evan |date = 7 January 2015 |publisher = Canadian Broadcasting Corporation |access-date = 6 November 2015 |archive-date = 5 November 2015 |archive-url = https://web.archive.org/web/20151105040802/http://www.cbc.ca/news/politics/climate-change-study-says-most-of-canada-s-oil-reserves-should-be-left-underground-1.2893013 |url-status = live}}{{cite journal |title=Unburnable fossil-fuel reserves|journal=Nature |date=January 2015 |volume= 517 |pages=150–2 |issue= 7533 |last1=Jacob |first1=Michael |last2=Hilaire |first2=Jérȏme |publisher= Macmillan Publishers |doi=10.1038/517150a |pmid=25567276|bibcode=2015Natur.517..150J|s2cid=4449048 |doi-access=free }}{{cite journal |title=The geographical distribution of fossil fuels unused when limiting global warming to 2°C |journal=Nature |date=January 2015 |volume=517 |pages=187–90 |issue=7533 |last1=McGlade |first1=Christophe |last2=Ekins |first2=Paul |publisher=Macmillan Publishers |doi=10.1038/nature14016 |pmid=25567285 |bibcode=2015Natur.517..187M |s2cid=4454113 |url=http://discovery.ucl.ac.uk/1473878/7/McGladeNatureCM5.pdf |access-date=1 September 2019 |archive-date=22 July 2018 |archive-url=https://web.archive.org/web/20180722005241/http://discovery.ucl.ac.uk/1473878/7/McGladeNatureCM5.pdf |url-status=live }}{{cite web|last=Revkin|first=Andrew C.|url=http://dotearth.blogs.nytimes.com/2013/05/03/on-unburnable-carbon-and-the-specter-of-a-carbon-bubble/|title=On 'Unburnable Carbon' and the Specter of a 'Carbon Bubble'|work=The New York Times|date=2 May 2013|access-date=14 May 2013|archive-date=11 May 2013|archive-url=https://web.archive.org/web/20130511071605/http://dotearth.blogs.nytimes.com/2013/05/03/on-unburnable-carbon-and-the-specter-of-a-carbon-bubble/|url-status=live}}{{cite web|last=Megan|first=Scott|url=http://www.rtcc.org/2014/09/18/new-york-where-the-carbon-bubble-threat-goes-mainstream/|title=New York: where the carbon bubble threat goes mainstream?|publisher=RTCC|date=18 September 2014|access-date=26 September 2014|archive-url=https://web.archive.org/web/20141216141232/http://www.rtcc.org/2014/09/18/new-york-where-the-carbon-bubble-threat-goes-mainstream/|archive-date=16 December 2014|url-status=dead}}

In mid-2015, the Centre for Science and Policy, University of Cambridge published a report assessing the risks from climate change in order to estimate the amount of resources that should be allocated to address them. The report notes that "standard economic estimates of the global costs of climate change are wildly sensitive both to assumptions about the science, and to judgments about the value of human life. They are also likely to be systematically biased towards underestimation of risk, as they tend to omit a wide range of impacts that are difficult to quantify".{{cite report |url=http://www.csap.cam.ac.uk/projects/climate-change-risk-assessment/ |title=Climate Change: A Risk Assessment |date=13 July 2015 |last1=King |first1=David |last2=Schrag |first2=Daniel |last3=Dadi |first3=Zhou |last4=Ye |first4=Qi |last5=Ghosh |first5=Arunabha |publisher=The Centre for Science and Policy, University of Cambridge |doi=10.1038/517150a |bibcode=2015Natur.517..150J |doi-access=free |access-date=10 November 2015 |archive-date=19 November 2021 |archive-url=https://web.archive.org/web/20211119203603/https://www.csap.cam.ac.uk/projects/climate-change-risk-assessment/ |url-status=live }}

By 2013, there was significant awareness in the financial industry of the risks associated with exposure to companies involved in extraction of fossil fuels.{{cite web|last=Randall|first=Tom|url=https://www.bloomberg.com/news/2013-11-18/oil-s-future-draws-blood-and-gore-in-investment-portfolios.html|title=Oil's Future Draws Blood and Gore in Investment Portfolios|publisher=Bloomberg|date=18 November 2013|access-date=5 March 2017|archive-date=26 December 2014|archive-url=https://web.archive.org/web/20141226162514/http://www.bloomberg.com/news/2013-11-18/oil-s-future-draws-blood-and-gore-in-investment-portfolios.html|url-status=live}} In early 2014, the FTSE Group, BlackRock and the Natural Resources Defense Council collaborated in the creation of a stock market index series that excludes companies linked to exploration, ownership or extraction of carbon-based fossil fuel reserves. These indices are intended to make it easier for investors to steer their investments away from such companies.{{cite news | title=Fossil Fuel-Free Index Will Help Investors Manage Climate Risks | author=Mike Scott | work=Forbes | url=https://www.forbes.com/sites/mikescott/2014/05/01/fossil-fuel-free-index-will-help-investors-manage-climate-risks/ | date=1 May 2014 | access-date=9 November 2015 | archive-date=2 October 2015 | archive-url=https://web.archive.org/web/20151002185516/http://www.forbes.com/sites/mikescott/2014/05/01/fossil-fuel-free-index-will-help-investors-manage-climate-risks/ | url-status=live }}{{cite news| last=Paton| first=James| url=https://www.bloomberg.com/news/2013-02-06/australia-wind-energy-cheaper-than-coal-natural-gas-bnef-says.html| title=Australian Wind Energy Now Cheaper Than Coal, Gas, BNEF Says| publisher=Bloomberg| date=7 February 2013| access-date=5 March 2017| archive-date=9 January 2015| archive-url=https://web.archive.org/web/20150109185456/http://www.bloomberg.com/news/2013-02-06/australia-wind-energy-cheaper-than-coal-natural-gas-bnef-says.html| url-status=live}} It has been proposed that companies be required by law to report on their greenhouse gas emissions and assess the risk this could pose to their future financial performance. According to Christiana Figueres, UNFCCC, companies have a duty to shareholders to move to a low-carbon economy, because of the effects of the carbon bubble.

The ongoing fossil fuel divestment campaign in universities, churches[https://www.nytimes.com/2013/07/04/us/church-dropping-fossil-fuel-investments.html Church Dropping Fossil Fuel Investments] {{Webarchive|url=https://web.archive.org/web/20171109000230/http://www.nytimes.com/2013/07/04/us/church-dropping-fossil-fuel-investments.html |date=9 November 2017 }}, The New York Times, 3 July 2013.[http://350.org/press-release/world-council-of-churches-endorses-fossil-fuel-divestment/ World Council of Churches Endorses Fossil Fuel Divestment] {{Webarchive|url=https://web.archive.org/web/20140712235206/http://350.org/press-release/world-council-of-churches-endorses-fossil-fuel-divestment/ |date=12 July 2014 }}, 350.org, 11 July 2014 and pension funds[https://publications.parliament.uk/pa/cm201314/cmselect/cmenvaud/uc191-i/uc19101.htm Oral Evidence Taken before the Environmental Audit Committee] {{Webarchive|url=https://web.archive.org/web/20180823115854/https://publications.parliament.uk/pa/cm201314/cmselect/cmenvaud/uc191-i/uc19101.htm |date=23 August 2018 }}, House of Commons Environmental Audit Committee, 26 June 2013 contributes to divestiture from fossil fuel companies.[http://www.abc.net.au/environment/articles/2013/05/13/3751205.htm Preventing a carbon bubble crash] {{Webarchive|url=https://web.archive.org/web/20130629122742/http://www.abc.net.au/environment/articles/2013/05/13/3751205.htm |date=29 June 2013 }}, ABS, 13 May 2013[http://www.renewableenergyworld.com/rea/news/article/2013/05/the-economic-case-for-divesting-from-fossil-fuels?page=all The Economic Case for Divesting from Fossil Fuels] {{Webarchive|url=https://web.archive.org/web/20140304042512/http://www.renewableenergyworld.com/rea/news/article/2013/05/the-economic-case-for-divesting-from-fossil-fuels?page=all |date=4 March 2014 }}, Renewable Energy World, 15 May 2013[http://www.rtcc.org/2014/05/15/fossil-free-investment-portfolios-soared-50-in-2013/ Fossil-free investment portfolios soared 50% in 2013] {{Webarchive|url=https://web.archive.org/web/20140519164602/http://www.rtcc.org/2014/05/15/fossil-free-investment-portfolios-soared-50-in-2013/ |date=19 May 2014 }}, Responding to Climate Change (RTCC), 15 May 2014 By late 2015, this divestiture was reported to reach $2.6 trillion,{{cite news |url = https://www.bloomberg.com/news/articles/2015-09-22/fossil-fuel-divestment-movement-exceeds-2-6-trillion

|title = Fossil-Fuel Divestment Movement Exceeds $2.6 Trillion |last = Martin |first = Chris |work = Bloomberg News |publisher = Bloomberg L.P. |date = 22 September 2015 |access-date = 10 November 2015 |archive-date = 10 November 2015 |archive-url = https://web.archive.org/web/20151110051546/http://www.bloomberg.com/news/articles/2015-09-22/fossil-fuel-divestment-movement-exceeds-2-6-trillion |url-status = live}}{{Cite web|url=https://www.boell.de/en/2015/11/09/profitability-deflating-carbon-bubble|title=Profitability: Deflating the carbon bubble|website=Heinrich-Böll-Stiftung|language=en|access-date=2019-03-14|archive-date=24 July 2019|archive-url=https://web.archive.org/web/20190724171323/https://www.boell.de/en/2015/11/09/profitability-deflating-carbon-bubble|url-status=live}} by September 2019, total divestment commitments had grown to an approximate value of $11.48 trillion.{{Cite web|url=https://gofossilfree.org/divestment/commitments/|title=Divestment Commitments|website=Fossil Free: Divestment|language=en-US|access-date=2019-09-29|archive-date=19 November 2017|archive-url=https://web.archive.org/web/20171119093935/https://gofossilfree.org/commitments/|url-status=live}}

In September 2019, when the University of California announced, it will divest its $83 billion in endowment and pension funds from the fossil fuel industry, UC officials said, they made it for financial reasons: "We believe hanging on to fossil fuel assets is a financial risk."{{Cite news|url=https://calmatters.org/education/higher-education/2019/09/uc-divests-fossil-fuels-citing-finance-renewable-energy-climate-change/|title=Citing 'financial risk,' UC pledges to divest from fossil fuels|last=Mello|first=Felicia|date=2019-09-18|website=CalMatters|language=en-US|access-date=2019-10-27|archive-date=15 October 2019|archive-url=https://web.archive.org/web/20191015171802/https://calmatters.org/education/higher-education/2019/09/uc-divests-fossil-fuels-citing-finance-renewable-energy-climate-change/|url-status=live}}{{Cite web|url=https://www.latimes.com/opinion/story/2019-09-16/divestment-fossil-fuel-university-of-california-climate-change|title=Opinion: UC investments are going fossil free. But not exactly for the reasons you may think|last1=Sherman|first1=Richard|last2=Singh Bachher|first2=Jagdeep|date=2019-09-17|website=Los Angeles Times|language=en-US|access-date=2019-10-27|archive-date=29 October 2019|archive-url=https://web.archive.org/web/20191029012314/https://www.latimes.com/opinion/story/2019-09-16/divestment-fossil-fuel-university-of-california-climate-change|url-status=live}}

Jeff Rubin suggested Canada should invest into hydraulic energy and agriculture rather than its oil sands as a way to avoid the effects of the bubble.{{Cite journal|last=ALTER|first=LLOYD|date=2015|title=When the carbon bubble bursts|url=https://www.jstor.org/stable/44149896|journal=Corporate Knights|volume=14|issue=4|pages=23|jstor=44149896 |issn=1703-2016}}

The price of renewable energy is continually dropping.{{cite report | url=http://www.carbontracker.org/report/lost_in_transition/ | title=Lost in Transition: How the energy sector is missing potential demand destruction | last1=Sussams | first1=Luke | last2=Leaton | first2=James | last3=Drew | first3=Tom | publisher=Carbon Tracker | date=21 October 2015 | access-date=6 November 2015 | archive-date=26 October 2015 | archive-url=https://web.archive.org/web/20151026053907/http://www.carbontracker.org/report/lost_in_transition/ | url-status=live }}{{Cite news|url=https://www.theguardian.com/environment/2019/oct/14/rise-renewables-oil-firms-decades-earlier-think|title=Rise of renewables may see off oil firms decades earlier than they think|last=Ambrose|first=Jillian|date=2019-10-14|work=The Guardian|access-date=2019-10-18|language=en-GB|issn=0261-3077|archive-date=18 October 2019|archive-url=https://web.archive.org/web/20191018145720/https://www.theguardian.com/environment/2019/oct/14/rise-renewables-oil-firms-decades-earlier-think|url-status=live}} As of 2014 new wind power is cheaper than new coal and gas power in Australia, China{{cite web|last=Parkinson|first=Giles|url=http://reneweconomy.com.au/2014/solar-grid-parity-why-australia-leads-the-world-80853|title=Solar grid parity – why Australia leads the world|publisher=Reneweconomy|date=21 May 2014|access-date=21 May 2014|archive-date=21 May 2014|archive-url=https://web.archive.org/web/20140521153124/http://reneweconomy.com.au/2014/solar-grid-parity-why-australia-leads-the-world-80853|url-status=live}} and the United States.{{cite web|last=Chen|first=Allan|url=http://newscenter.lbl.gov/2014/08/18/new-study-finds-price-of-wind-energy-in-us-at-an-all-time-low-competitiveness-of-wind-has-improved/|title=New Study Finds Price of Wind Energy in US at an All-Time Low; Competitiveness of Wind Has Improved|publisher=Lawrence Berkeley National Laboratory|date=18 August 2014|access-date=21 August 2014|archive-date=21 August 2014|archive-url=https://web.archive.org/web/20140821213009/http://newscenter.lbl.gov/2014/08/18/new-study-finds-price-of-wind-energy-in-us-at-an-all-time-low-competitiveness-of-wind-has-improved/|url-status=live}} Also the electricity produced from a photovoltaic roof system is cheaper than the electricity from the grid in many countries and places in the world.[http://www.renewablesinternational.net/german-pv-drops-to-15-cents-max/150/510/62457/ German PV drops to 15 cents max] {{Webarchive|url=https://web.archive.org/web/20131106045845/http://www.renewablesinternational.net/german-pv-drops-to-15-cents-max/150/510/62457/ |date=6 November 2013 }}, Renewables International, 2 May 2013

Fossil fuels are known for their huge negative externalities or hidden costs.{{cite web|last=Malone|first=Scott|url=https://www.reuters.com/article/us-usa-coal-study-idUSTRE71F4X820110216|title=Coal's hidden costs top $345 billion in U.S.: study|publisher=Reuters|date=16 February 2011|access-date=30 June 2017|archive-date=24 September 2015|archive-url=https://web.archive.org/web/20150924151234/http://www.reuters.com/article/2011/02/16/us-usa-coal-study-idUSTRE71F4X820110216|url-status=live}} Tackling this market failure will make alternative energies more competitive and will reduce the consumption of fossil fuels.{{cite web|last=Wong|first=Edward|url=https://www.nytimes.com/2013/03/22/world/asia/as-chinas-environmental-woes-worsen-infighting-emerges-as-biggest-obstacle.html?pagewanted=all&_r=0|title=As Pollution Worsens in China, Solutions Succumb to Infighting|work=The New York Times|date=21 March 2013|access-date=26 February 2017|archive-date=19 September 2017|archive-url=https://web.archive.org/web/20170919180005/http://www.nytimes.com/2013/03/22/world/asia/as-chinas-environmental-woes-worsen-infighting-emerges-as-biggest-obstacle.html?pagewanted=all&_r=0|url-status=live}}

According to the International Monetary Fund, governments around the world gave $523 billion direct subsidies for fossil fuels in 2011.[http://www.ewea.org/news/detail/?cHash=00cc30e056e10baf3a1d2b460271f233&tx_ttnews%5Btt_news%5D=2048 EWEA Blog: Global fossil fuel subsidies amount to $1.9 trillion – IMF] {{Webarchive|url=https://web.archive.org/web/20130518055535/http://www.ewea.org/news/detail/?tx_ttnews%5Btt_news%5D=2048&cHash=00cc30e056e10baf3a1d2b460271f233 |date=18 May 2013 }}, EWEA, 5 April 2013 If a carbon tax of $25 per ton of {{CO2|link=yes}} is included the subsidies total $1.9 trillion only for 2011.[http://www.imf.org/external/np/sec/pr/2013/pr1393.htm IMF Calls for Global Reform of Energy Subsidies: Sees Major Gains for Economic Growth and the Environment] {{Webarchive|url=https://web.archive.org/web/20130425164120/http://www.imf.org/external/np/sec/pr/2013/pr1393.htm |date=25 April 2013 }}, IMF, 27 March 2013 Removing fossil fuels subsidies will further reduce their consumption and make the alternative energies even more competitive.

As the penetration of the renewable energy increases so will the wealth of the renewable energy corporations. This and the increasing number of employees in the renewable energy sector will inevitably transform into political lobbying against fossil fuels.{{cite web|last=Poole|first=Lauren|url=http://www.renewableenergyworld.com/rea/news/article/2013/05/beyond-the-ptc-wind-energys-future|title=Beyond the PTC – Wind Energy's Future|publisher=Renewable Energy World|date=9 May 2013|access-date=18 May 2013|archive-date=19 November 2021|archive-url=https://web.archive.org/web/20211119203649/https://www.renewableenergyworld.com/news/|url-status=live}}

Urbanization combined with increasing availability of convenient, safe and efficient public transport, green buildings and efficient energy distribution, as well as extended product life/use/re-use, increased local recycling and self-sustainability in raw materials drive down energy consumption. Perversely, ready access to travel and luxury, more batteries (energy storage and conversion losses) and proliferation of low cost LED technology, e.g. for advertising and decorative uses, may negate some of the potential energy savings. Switching to renewables sourced, electricity based transportation will reduce the demand for fossil fuels, particularly petroleum.[http://cleantechnica.com/2013/07/23/peak-oil-less-a-concern-as-alternatives-reduce-demand "Peak Oil" Less A Concern As Alternatives Reduce Demand] {{Webarchive|url=https://web.archive.org/web/20130816151833/http://cleantechnica.com/2013/07/23/peak-oil-less-a-concern-as-alternatives-reduce-demand/ |date=16 August 2013 }}, Cleantechnica, 23 July 2013 Combining roof photovoltaics with second hand EV batteries will further reduce the dependence on fossil fuels as they will provide the needed grid storage for the times when the intermittent renewable energy sources are not producing electricity.[http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2012/Nov/electrification/1114_reuse.html GM, ABB Demonstrate Chevrolet Volt Battery Reuse Unit] {{Webarchive|url=https://web.archive.org/web/20211119203748/https://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2012/Nov/electrification/1114_reuse.html |date=19 November 2021 }}, General Motors, 11 November 2012

Innovations in, for example, information technology, miniaturisation, LEDs, virtual reality, 3D printing, new materials and biotechnology enable energy reduction in the areas of human sustenance and travel, as well as physical product creation and distribution. They also offer new avenues for economic growth and technological leadership, and are thus especially important for sustained wealth creation in the most developed, net-energy importing nations. Energy consumption may be expected to decrease as the service sector of the economy continues to grow whilst heavy industry, construction, manufacturing and agricultural sectors reduce. Increased investments in energy efficiency may lead to less consumed energy[https://www.forbes.com/sites/amorylovins/2014/07/18/energy-intensity-the-secret-revolution/ Energy Intensity: The Secret Revolution] {{Webarchive|url=https://web.archive.org/web/20170830214208/https://www.forbes.com/sites/amorylovins/2014/07/18/energy-intensity-the-secret-revolution/ |date=30 August 2017 }}, Forbes, 18 July 2014 even when the economy grows.{{cite web |url=http://ftalphaville.ft.com/2014/01/17/1745542/energy-is-gradually-decoupling-from-economic-growth/ |archive-url=https://web.archive.org/web/20140119073009/http://ftalphaville.ft.com/2014/01/17/1745542/energy-is-gradually-decoupling-from-economic-growth/ |archive-date=19 January 2014 |url-status=dead |title=Energy is gradually decoupling from economic growth {{pipe}} FT Alphaville |date=17 January 2014 |access-date=10 July 2015 |df=dmy-all }} Without growth in energy usage the prices of fossil fuels will decrease and most of the mega energy projects may be uneconomical.

A shrinking and ageing, already materially prosperous, satisfied and individualistic society may be less motivated towards additional, energy consuming material goods and new construction.{{Original research inline|date=January 2022}} On the other hand, longer life expectancy and increasing leisure and travel time will increase total energy use over an individual's lifetime.{{Original research inline|date=January 2022}} According to research by U.S. PIRG Education Fund reported in late 2014: "Over the last decade – after 60-plus years of steady increases – the number of miles driven by the average American has been falling. Young Americans have experienced the greatest changes: driving less; taking public transport, biking and walking more; and seeking out places to live in cities and walkable communities where driving is an option, not a necessity."[http://www.uspirg.org/reports/usp/millennials-motion MILLENNIALS IN MOTION] {{Webarchive|url=https://web.archive.org/web/20141027133442/http://www.uspirg.org/reports/usp/millennials-motion |date=27 October 2014 }}, U.S. PIRG Education Fund, 14 October 2014 Data from the U.S. Energy Information Administration show that U.S. consumption of both coal and petroleum liquids peaked in 2005, and at the end of 2014 had fallen by 21% and 13% respectively. Consumption of natural gas continued to climb, resulting in the rate of total fossil fuel consumption in terms of energy units falling only 6% from its peak in 2007 to a plateau. On the other hand, global consumption of petroleum climbed steadily a total of 32% from 1995 to 2014.{{cite report

|url= http://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf|title= Monthly Energy Review— October 2015

|publisher= U.S. Energy Information Administration|date= 27 October 2015|access-date= 9 November 2015|archive-date= 25 November 2015|archive-url= https://web.archive.org/web/20151125220804/http://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf|url-status= live}}

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