Impax Asset Management Report Got It Backwards

Impax Asset Management, a $2 billion firm mainly investing in renewable energy, has published a short report titled “Beyond Fossil Fuels: The Investment Case for Fossil Fuel Divestment”.

Thanks to this Tweet by the Investor Network on Climate Risk for the link.

The report supports calls by Bill McKibben (do the math) and Carbontracker for divestment from fossil fuel companies. And it also asserts that fossil fuel will lose in value if stronger regulation lead to more of the treasure staying in the ground.

This basic idea is wrong. If we put a big “off limits” sign on 80 percent of the World’s oil reserves, that would obviously lead to much higher market prices for the remaining 20 percent. That’s just basic common sense. Reducing supply by 80 percent means higher prices, not lower prices.

That will mean that the fossil fuel reserves will go up in valuation as well. Remember that they can always be used as fuel with carbon capture in place, and that they can always be used as feedstock for the petrochemical industry.

But this is an interesting report. It gives some nice details, like a list of the major fossil fuel companies, and a list of the major renewable energy stocks.


Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003,

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