Fossil fuels are sub-prime assets, Bank of England governor warned

Article by Damian Carrington

Open letter to Sir Mervyn King says overexposure to high-carbon assets by London-listed companies risks creating a 'carbon bubble'

"These high-carbon assets pose significant strategic challenges for the future prosperity of Britain that just can't be ignored," said investment manager James Cameron, who is a member of the prime minister's business advisory group. "Investors continue to pour cash into unsustainable assets without understanding the risks associated with these investments, such as climate change, local pollution, fossil fuel price volatility, political risk and catastrophes such as Deepwater Horizon."

"We need to prevent the deep and profound harm that could be wrought by an overexposure to high-carbon assets and a rapid shift in their values," said Ben Caldecott, head of policy at investment company Climate Change Capital, who signed the letter along with Aviva Investors. "Unlike sub-prime mortgages before the financial crisis, this time regulators must act to prevent the build-up of systemic risk in our financial system."

Read the full article on the Guardian website here.

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Fossil fuels are sub-prime assets, Bank of England governor warned