Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • Sections
  • News

Fossil fuel finance crisis fears

Open-access content Tuesday 17th January 2023 — updated 9.22am, Wednesday 18th January 2023
web_Falling-oil_credit_iStock-1451643752.jpg

A future financial crisis caused by stranded fossil fuel assets will lead to millions of job losses across the world and leave the UK economy in tatters, a study warns.

The One for One campaign’s report Banking on Bailouts: Sizing the social costs when the fossil fuel bubble bursts predicts that the UK could suffer 500,000 job losses and be forced to spend £674bn bailing out banks unless the City prepares for a crash in fossil fuel values due to climate change regulations. A fossil fuel-led financial crisis could lead to the loss of around 13.6m jobs globally and see banks requiring a £4.9trn bailout, it adds.

The study points to a “growing risk of a fossil fuel stranded asset bubble”, with climate mitigation policies, changing consumer behaviour and technological developments driving down the value of oil, gas and coal projects. This leaves the UK “particularly at risk in the coming fossil fuel-led financial crisis due to the dominance of the financial services sector”.

The campaign says that, under a “no transition scenario” where the rise in average temperatures during the 21st century breaches 3.5°C, the UK government will be forced to deliver a £900bn bailout due to a crash in fossil fuel values – more than the combined government bailouts for the 2008 financial crisis and the pandemic. A “slow transition scenario”, where net-zero is achieved by 2050, could still mean a bailout of up to £675bn.

The study calls for a 1,250% risk weighting for capital requirements to be applied to the financing of new fossil fuel exploration and extraction projects. This would mean that for every pound or dollar invested in such projects, financial institutions must have the same sum to cover the cost of risk.

Image credit | iStock
Also filed in
News

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Actuarial Manager

London (Central)
£100,000 - £130,000 basic + bonus and benefits
Reference
145832

Pricing Analyst

London, England
£30000 - £45000 per annum
Reference
145831

Capital Modelling Analyst

London, England
£35000 - £55000 per annum
Reference
145830
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ