QUESTIONS abound after the G7 summit in Germany. There, leaders of seven of the world's most powerful developed countries promised to stop using fossil fuels by the end of the century and to cut global emissions by up to 70% of 2010 levels by 2050. First, it is unclear how promises made by the middle-aged leaders of rich countries will be honoured by their grandchildren. And even if the climate-change conference in Paris later this year reaches a deal, it is unclear if it will stick, or whether they will come via carbon taxes, a cap-and-trade system, subsidies for renewables, or all of these policies combined.
What is clear is that life for the fossil-fuel industries has just got a lot tougher. Energy companies’ investment horizons stretch decades into the future. For instance, construction on the huge Sullom Voe oil terminal in Britain’s Shetland Islands started in 1975; 40 years later it is still a vital part of the infrastructure of the North Sea oil and gas industry. For energy projects under consideration right now, costing perhaps tens of billions of dollars and with a pay-off over decades (such as ultra-deep-water and Arctic drilling, or...Continue reading
Source :Business and finance http://ift.tt/1F65VEw
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