John Fullerton, president of the Capital Institute, working with the Carbon Tracker Initiative and other data sources, estimated the approximate value of that unburnable carbon in the neighborhood of $20 trillion. This is an order of magnitude estimate to illustrate the choice: You can have a livable climate or you can have your old economic engine, but you cannot have both.
Many observers believe unburnable carbon is the real obstacle to progress on climate change. To stay within planetary limits with a simple cap on emissions would mean destroying trillions of dollars of the market value of publicly traded and state-owned enterprises woven deeply into the fabric of our retirement systems and global security calculations. They also wield extraordinary power because of their earnings, giving them trillions of reasons to fight.
What if there was another option? What if there was a way to get oil and gas out of combustion and preserve the lion’s share of their asset valuation? There is.
Call it the Feedstock Shift: Instead of burning hydrocarbons, we build with them. Oil and gas contain some of the most sophisticated polymers available in bulk and our society has chosen to burn most of them. With the rest, approximately 18 percent currently, we make plastics, carbon fiber, 3D printing “ink" and advanced fabrics — essential elements of our global economy for which demand only will increase.
However, given the industry’s current business model and its hard-wired market for fuels, natural demographic increase in demand for materials will not be sufficient to attract all the petroleum and gas products we cannot burn to stay within the necessary 1.5 degrees of warming.
To do that, we will need to make a conscious, aggressive shift, not unlike the one Winston Churchill executed when he shifted the Royal Navy from coal to oil: Britain was not at risk of running out of coal; rather, oil offered strategically superior characteristics and important advantages that Britain wanted to exploit. Today the United States and the major economies have a similar strategic opportunity. Executing the Feedstock Shift removes the primary political obstacle to dealing with climate change and minimizes the risk of market shocks, while removing oil and gas as a geopolitical Achilles' heel for the world’s major economies. For the United States, Europe, Japan, China and India, all facing different combinations of climate and energy security issues, this is only a crisis or two away from being a strategic no-brainer.
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