Carney on the carbon bubble and stranded assets

By some measures, based on science, the scale of the energy revolution required is staggering.

If we had started in 2000, we could have hit the 1.5°C objective by halving emissions every thirty years. Now, we must halve emissions every ten years. If we wait another four years, the challenge will be to halve emissions every year. If we wait another eight years, our 1.5°C carbon budget will be exhausted.

The entrepreneur and engineer Saul Griffith argues that the carbon-emitting properties of our committed physical capital mean that we are locked in to use up the residual carbon budget, even if no one buys another car with an internal combustion engine, installs a new gas-fired hot-water heater or, at a larger scale, constructs a new coal power plant. That’s because, just as we expect a new car to run for a decade or more, we expect our machines to be used until they are fully depreciated. If the committed emissions of all the machines over their useful lives will largely exhaust the 1.5°C carbon budget, going forward we will need almost all new machines, like cars, to be zero carbon. Currently, electric car sales, despite being one of the hottest segments of the market, are as a percentage in single digits. This implies that, if we are to meet society’s objective, there will be scrappage and stranded assets.

…

To meet the 1.5°C target, more than 80 per cent of current fossil fuel reserves (including three-quarters of coal, half of gas, one-third of oil) would need to stay in the ground, stranding these assets. The equivalent for less than 2°C is about 60 per cent of fossil fuel assets staying in the ground (where they would no longer be assets).

When I mentioned the prospect of stranded assets in a speech in 2015, it was met with howls of outrage from the industry. That was in part because many had refused to perform the basic reconcilliation between the objectives society had agreed in Paris (keeping temperature increases below 2°C), the carbon budgets science estimated were necessary to achieve them and the consequences this had for fossil fuel extraction. They couldn’t, or wouldn’t, undertake the basic calculations that a teenager, Greta Thunberg, would easily master and powerfully project. Now recognition is growing, even in the oil and gas industry, that some fossil fuel assets will be stranded — although, as we shall see later in the chapter, pricing in financial markets remains wholly inconsistent with the transition.

Carney, Mark. Value(s): Building a Better World for All. Penguin Random House Canada, 2021. p. 273–4, 278

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

17 thoughts on “Carney on the carbon bubble and stranded assets”

  4. There is much I admire in Prime Minister Carney – his experience, his character and his measured approach to problems

    However, I am disappointed that in the mandate letter for his government which was developed after two days of consultation with his ministers, there is no reference to protection of the environment or the fight against climate change among the seven key priorities of government. This absence is very disappointing for me.

  5. Carney is in the classic politician’s position, lying to all sides.

    He knows that building new fossil fuel infrastructure is economically and morally foolhardy — a further investment into a death cult that is killing the world. But he knows he can’t admit that in the context of Canadian politics, and must pander to pro-fossil voters, corporations, and regions.

    He is in this position because Canadian voters insist on being lied to about climate change. They demand leaders who say in a very wooly way that they will definitely deal with the problem, but voters also insist that our climate and energy policies be grossly inadequate to actually meet that objective. Canadians would rather destroy the whole future for everybody than change their lives or accept new constraints on their behaviour: the commonplace psychopathy of our civilization.

    Canadians are like a diabetic patient who demands a doctor who will intone seriously about the risks of diabetes in general, but who will still cheer them on whenever there is a hot fudge sundae or a bag of licorice to eat.

  6. As for Carney’s promise to make Canada an energy superpower, there is reason to believe the PM can do this.

    Unlike former prime minister Justin Trudeau, who was often adamant on environmental issues, Carney has said loudly and clearly that he is above all else a pragmatist. If something isn’t working, he is prepared to reverse the party line. That is exactly what he did on the Trudeau government’s deeply unpopular carbon tax.

    If Carney really intends to make Canada an energy superpower, there is no escaping a hard political fact. The new PM will have to walk away from Bill C-69. The Impact Assessment Act requires assessments for environmental, health, social and economic impacts and the rights of Indigenous people before a major resource project can get off the ground. Critics have nicknamed it the “No More Pipelines Act.” Canada can’t be an energy superpower unless conventional energy resources are significantly expanded.

    But there are consequences if Carney turns his back on Bill C-69 as he did on the carbon tax.

    A lot of Liberals in his cabinet and caucus endorsed that legislation in the Trudeau government. Former environment minister Steven Guilbeault has already raised questions about building new pipelines, and he isn’t the only one.

    Quebec has never been keen on an east-west pipeline, which is the most likely project Carney will eventually back. Quebec’s reflexive opposition eased somewhat after President Trump’s frontal assault on Canadian sovereignty and the economy. But there is still no guarantee that Premier François Legault will sign on.
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    And then there is the Indigenous issue at stake on this file. Unlike Pierre Poilievre, who wants to quick-march energy projects through the regulatory system, Carney has pledged that he will consult with all stakeholders before greenlighting any major project. And that means he might well run up against First Nations’ objections to a pipeline crossing their territories.

    Bottom line on Carney’s energy superpower promise? He can probably do it, but not quickly and not without a political price.

    https://thetyee.ca/Analysis/2025/05/26/How-Know-Carney-Real-Deal/

  7. “Carney has no choice but to meet the West’s sense of aggrievement with a new approach. But the question is how new? It is highly unlikely the PM can agree to Alberta’s demand that it receive equalization payments like Ontario, even though Alberta is a net contributor to federal coffers. The point about Canada’s complex equalization policy is not to reward provinces with high fiscal capacity; rather, it is to level out the system so that all provinces have the same advantages.

    That said, Carney cannot expect Alberta to accept mere rhetoric rather than real change from his government.

    And that means only one thing: getting Alberta’s fossil fuel resources to the world at significantly increased volumes. Ottawa can facilitate or frustrate that effort. And only by making the first choice can Carney enhance national unity. Pipelines rather than environmental purity will be the name of the game.”

  8. Carney discusses ‘partnerships’ with oil and gas executives in Calgary

    https://edmonton.citynews.ca/2025/06/01/carney-partnerships-oil-gas-executives-calgary/

    Prime Minister Mark Carney sat down with oil and gas executives in Calgary Sunday to discuss partnerships and to get their input for his plans to make Canada an energy superpower.

    Carney, in his first visit to Calgary since being sworn in as prime minister, held a closed-door roundtable with more than two dozen members of the energy sector.

    Attendees included Tourmaline Oil CEO Michael Rose, Pathways Alliance President Kendall Dilling, ATCO CEO Nancy Southern, Imperial Oil President John Whelan and Jon McKenzie, president of Cenovus Energy.

    Reporters were only allowed to hear a few comments from the prime minister before being asked to leave the room at the Harry Hays building.

  9. The Alberta premier had sent a letter to Carney in mid-May, saying there are several preconditions necessary to make his nation-building ambitions a success: Include an oil pipeline on the initial list of projects, abandon the “unconstitutional” oil and gas emissions cap, overhaul the Impact Assessment Act and repeal Canada’s industrial carbon tax, as well as clean electricity regulations.

    In a social media post on Monday morning, Smith indicated that her meeting with Carney went well, but said she wants to see more of a commitment to roll back the policies she outlined in her May letter.

    “While there appears to be a desire to move forward with new projects, including a West Coast bitumen pipeline, a clear commitment is needed to act on barriers that have held back private investment,” Smith wrote in a post on X.

    https://www.cbc.ca/news/politics/premiers-meeting-prime-minister-carney-major-projects-1.7549577

  10. Smith said Monday evening that she was encouraged by the inclusion of language endorsing the movement of “decarbonized Canadian oil and gas by pipelines” in the meeting communiqué.

    “Let’s call it the grand bargain,” Smith told reporters in Saskatoon, referring to the idea of twinning new pipeline proposals with large-scale decarbonization projects.

    Carney said Monday that he’d consider fast-tracking a new oil pipeline to the West Coast if it shipped “decarbonized barrels” to new markets.

    “There’s real potential there (and), if further developed, the federal government will look to advance it,” said Carney.

    https://nationalpost.com/news/canada/alberta-and-ottawa-are-touting-a-grand-bargain-on-decarbonized-oil-but-some-are-skeptical

  12. Mark Carney Is Turning His Back on Climate Action

    And Canada is losing a chance for leadership and sustained economic growth.

    https://thetyee.ca/Opinion/2025/06/23/Mark-Carney-Turning-Back-Climate-Action/

    …

    Carney was the United Nations Special Envoy on Climate Action and Finance and was behind the UN-backed Net-Zero Banking Alliance, so some Canadians might have assumed he’d prioritize climate action if he won the election.

    Instead, Carney has described developing fossil fuel infrastructure as “pragmatic.”

    …

    Banks that felt pressure to at least recognize sustainable finance during the Joe Biden administration joined Carney’s Net-Zero Banking Alliance.

    But as soon as Trump came to power a second time and walked away from the Paris Agreement, many American banks abandoned the alliance. Canadian banks followed suit, and Carney remarkably missed another moment to show Canadian leadership by stopping their exit.

    In fact, Carney seems to have abandoned his own organization to appease Trump as the president made multiple “51st state” threats.

  13. Samson allows that tradeoffs are inevitable, and that Canadians may have to brace themselves for a new pipeline or two.

    “It seems like he will have to compromise on certain things and that may involve an oil pipeline; it may involve more LNG projects and, and so that certainly will disappoint people who are looking to reduce fossil fuel production,” she says. But Samson remains “cautiously optimistic” that Carney’s overall focus is still fixed on the energy transition. “If some fossil fuel production is a way to get to that – is a way to raise the revenue and get the buy-in to accomplish those things and build out the infrastructure – with that long term goal in mind, I think I can get behind it.”

    But those with a long memory may recall that is precisely the reasoning Justin Trudeau provided for expanding the Trans Mountain pipeline.

    “The TMX project is a significant investment in Canadians and in Canada’s future that will … fund the clean energy solutions that Canada needs to stay competitive on the global stage,” Trudeau said in announcing the purchase in 2019.

    So the question under Carney becomes: when, exactly, does he mean what he says?

    https://www.nationalobserver.com/2025/07/02/analysis/carneys-agenda-climate-nowhere-everywhere

  17. And that might be the real surprise. Not that Carney partnered with the Conservatives, but that after all that climate talk, all that values talk, all that global credentials talk, he didn’t even call the people who were ready to help.

    “I don’t want to condemn Mark Carney as no different than Poilievre or Harper. He could be a climate champion,” said May. But if he is, he sure is keeping it under wraps.

    “The only thing he’s done on climate so far is cancel the carbon tax, which was the one thing the Liberals ever did that was actually working.”

    Carney promised to move fast — and he did.

    The One Canadian Economy Act, which gives cabinet sweeping powers to fast-track “national interest” projects by skipping environmental regulations and laws, passed into law in record time. Only two weeks.

    The Greens, the NDP and the Bloc allied against the bill. That disillusionment isn’t restricted to the Ottawa bubble.

    With the One Canadian Economy law in place, Carney is now promising to speed up the building of energy projects as quickly as you can say “I voted Liberal.”

    The list of environmental organizations turning on him is growing by the day: Citizens’ Climate Lobby, 350.org, Leadnow, the David Suzuki Foundation, For Our Kids, MiningWatch Canada, the Climate Action Network, West Coast Environmental Law, the Canadian Environmental Law Association. All have made public statements calling out the Carney government.

    Keith Stewart of Greenpeace Canada: “Mark Carney ran for prime minister as the banker who cared about climate change, but with Bill C-5, he is governing like Stephen Harper on steroids.”

    Ecojustice’s Charlie Hatt: “This rushed and poorly vetted law could tie our country’s future to fossil fuel industry megaprojects that won’t protect us from the threat of Trump or help us face the growing dangers of climate change and the biodiversity crisis. We hope we’re wrong.”

    The One Canadian Economy Act flew through Parliament so fast it also knocked reconciliation sideways. Some First Nations Chiefs who travelled to Ottawa to testify at second reading didn’t even get to give evidence to the committee — their spots were cut for lack of time.

    https://thetyee.ca/Analysis/2025/07/10/Carney-Redraws-Political-Map-New-Democrats/

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