Speaking of the Keystone XL fight, another underrated reason to prevent development of extremely dirty carbon deposits is to prevent the creation of yet another set of entrenched, wealthy interests who will have to be expropriated if devastating climate change is to be avoided. As Bill McKibben has written, there are about 2,800 billion tons of proven carbon reserves in the world, but only a fifth of that can be burned:
Yes, this coal and gas and oil is still technically in the soil. But it’s already economically aboveground – it’s figured into share prices, companies are borrowing money against it, nations are basing their budgets on the presumed returns from their patrimony. It explains why the big fossil-fuel companies have fought so hard to prevent the regulation of carbon dioxide – those reserves are their primary asset, the holding that gives their companies their value. It’s why they’ve worked so hard these past years to figure out how to unlock the oil in Canada’s tar sands, or how to drill miles beneath the sea, or how to frack the Appalachians.
If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn’t pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today’s market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you’d be writing off $20 trillion in assets.
This applies not just to companies but to whole nations. Places like Angola or Nigeria have long been petrostates—completely captured by the oil industry—but Canada is showing increasing symptoms. Though the US can make a difference only on the margins, preventing development of the Albertan tar sands would probably be a healthy thing for Canadian democracy generally.