Lecture
This lecture discusses the economic implications of energy supply and the transition to sustainable practices. It highlights the concept of stranded assets, particularly in the fossil fuel sector, where investments may become worthless due to climate policies and market changes. The instructor explains the carbon bubble phenomenon, where fossil fuel companies hold reserves that exceed the global carbon budget necessary to limit temperature rise. The discussion includes the financial risks associated with these stranded assets, estimated at $2.2 trillion, and the potential for significant losses for investors. The lecture also addresses the technological and financial lock-in effects that hinder the transition away from fossil fuels, emphasizing the need for policy changes to mitigate these risks. The instructor presents data on fossil fuel emissions and the urgent need to reorient investments towards sustainable energy solutions, while also discussing the challenges posed by existing contracts and infrastructure that perpetuate reliance on fossil fuels. Overall, the lecture provides a comprehensive overview of the economic challenges and necessary shifts in energy investment strategies.