Climate change: the risks of stranded fossil fuel assets and resources to the developing world

Kyra Bos and Joyeeta Gupta

Third World Quarterly, 2018, vol. 39, issue 3, 436-453

Abstract: Under the Paris Agreement, 80% of all proven fossil fuel reserves become stranded resources and investments already made in such resources turn into stranded assets. Much of the existing literature focuses on equitable burden sharing; only a few articles examine the risks for developing countries that invest in new fossil fuels. Hence, this paper addresses the question: What are the risks of investing in fossil fuels for developing countries? In doing so, it examines Kenya, a prospective fossil fuel producer, and China, an investor in fossil fuels. In terms of short- to long-term risks, ignoring new fossil fuels and investing in renewables is favourable and politically, socially, ecologically and economically more rewarding, not least because latecomers to development run the risk of having to compensate investors when new fossil fuel assets strand prematurely and become unrecoverable.

Date: 2018
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DOI: 10.1080/01436597.2017.1387477

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