How Climate Change Could Destroy Energy Companies: TOTAL S.A. (TOT), Statoil ASA (STO) and More

As Hurricane Sandy sparked a conversation on climate change’s role after affecting millions, similar weather events could quickly change political climates elsewhere in favor of environmental restrictions. Take China’s current smog issue, which has led to cancelled flights and closed factories, and may lead to clean air legislation.

But inertia is a strong force
Even with more climate advocacy, the world is still far from hitting the two-degree and 450 ppm goals. Globally, we would need to decarbonize at an annual average rate of over 5% through 2050, while we only managed to decarbonize 0.7% in 2011. So, the way things currently are, two-degrees looks far from doable, and energy companies likely will realize the worth of their reserves.

However, there’s also the possibility that if technologies like those that capture carbon improve, both energy companies and those worried about climate change could realize a world that’s mitigated effects to both market caps and marsupials. Climate doesn’t have to be a zero-sum game, and companies that remain sustainable far into the future are likely to give investors the most returns.

The article How Climate Change Could Destroy Energy Companies originally appeared on Fool.com and is written by Dan Newman.

Fool contributor Dan Newman has no position in any stocks mentioned. The Motley Fool recommends Statoil (ADR) and Total SA. (ADR).

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