"You need to really scrub your investment portfolios, because I guarantee you _ as my longtime good redneck friends in Tennessee say, I guarandamntee you _ that if you really take a fine-tooth comb and go through your portfolios, many of you are going to find them chock-full of sub prime carbon assets."
Al Gore said this in a speech given yesterday at a UN function held for 500 prominent financial leaders and institutional investors who came searching for insights on shifting business currents as the world shifts to cleaner energy sources and fuels. Gore also said, "Similarly, the assumption that you can safely invest in assets that come from business models that assume carbon is free is an assumption that is about to go splat. You have lots of assets, many of you do, in your portfolios right now that truly do deserve that epithet 'subprime.'" Gore also compared the financial risks facing investors in carbon-using industries with the meltdown in the market for sub prime mortgages.
What Al Gore is saying does make sense. Right now carbon is free, but it very likely won't be in a year. Big carbon emitting companies are going to take a hit, but how big of a hit is the question. I'm sure these big energy companies have been preparing for this for years. I don't see a catastrophic plunge in carbon-using industries as Gore suggests, but definitely fluctuations in the market. Or maybe global warming is a hell of lot a worse than we all predicted so we should forget investing and hit up Vegas.