Don't Let A Carbon Bubble Pop Your Retirement Savings

April 30, 2014- The long-term effect of the use of fossil fuels and global warming include the impact on retirement savings.

In an article entitled "Fossil Fuels May Ruin Your Retirement," the Green Bloomer Blog on the website treehugger.com is reporting on how, at the same time the world's largest energy companies own vast coal, oil and gas reserves, researchers are busy calculating what our "carbon budget" should be so as to reduce global warming to less than 2 degrees Celsius.

Known fossil reserves, considered assets, greatly exceed that "carbon budget." So the trick is, will we collectively use them with unknown consequences? Or will we at some point show restraint and essentially allow the unused assets to become "stranded"?

Either way, the assets may be creating a systemic risk, a "carbon bubble," in financial markets.

"That's where your and my retirement comes in," treehugger.com writes. "If you have retirement investments in stock or mutual funds, chances are you own a piece of those big energy companies, such as ExxonMobil."


Is this a farfetched scenario? Treehugger.com points to students at "hundreds of colleges and U.S. universities" conducting campaigns to get the institutions to divest from fossil fuel investments. Treehugger.com writes that one choice people have is to transfer retirement savings to socially responsible funds, though they warn of possible lower returns.

Read the full Treehugger.com post here.

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