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Can the Carbon Bubble become a serious Financial Bubble?
The notion of the carbon bubble - i.e. that a significant amount of fossil fuel reserves must be left in the ground if we are to keep to the 2 degrees global warming threshold - is becoming accepted by many policymakers. Policymakers need to take into consideration the implications of the carbon bubble on the financial markets due to the elevated risk of a quickly increasing number of stranded assets. The loss in value of fossil fuel companies is growing and may have considerable impacts on the economy.