By Paul Homewood
h/t Ian Magness
Eir Nolsoe claims to be the Telegraph’s Senior Economics Reporter, but she evidently knows nothing about economics.
In an article this week – “Limiting global warming to cost British workers equivalent of £2,600 each”, she falls for Mark Carney’s stranded asset con, writing:
“Net Zero will cost the average British worker the equivalent of almost £2,600 as fossil fuel assets worth billions of pounds become worthless.
So-called “stranded assets” will cost the UK economy £110bn by 2040, analysis by the UK Sustainable Investment and Finance Association (UKSIF) shows. The group said this was equal to £2,595 for every working adult in Britain.
The figures reflect the cost of investments in industries like oil and gas that are set to become worthless as the world transitions away from fossil fuels. This includes untapped reserves and physical infrastructure such as gas pipes in the ground and oil rigs in the North Sea, which much be decommissioned safely at a cost of billions.
Some £15.2bn of pension assets could also become worthless by 2040, UKSIF warned, equal to 0.5pc of the total UK pension pot.”
https://www.telegraph.co.uk/business/2025/03/06/net-zero-to-cost-british-workers-2600-each/
Has she never heard of discounted cash flow? A pound today will be virtually worthless in thirty years time.
The shareholder value of, say, BP is largely predicated on expected income streams in the next ten years or so.
It is the same at a micro level. When BP invest in a new oil field, they plan on a payback of maybe ten years. Anything after that is pure profit. Using this report’s logic, all oil developments will eventually be worthless when the oil runs out.
Oil companies typically invest a large chunk of their cash flow. If market conditions change in future, such as reduced demand, they will simply switch this capital spend into raising dividends and share buybacks. They have done this in the past when there is a glut of oil and prices are low.
That way, investors recover their money anyway.