Al Gore warns of a $22 trillion ‘subprime carbon bubble’

Gore, speaking from the COP26 climate summit, said that investors caught on the wrong side of history will face losses.

Britain's Prince Charles speaks with former United States Vice President Al Gore during the United Nations Climate Change Conference (COP26) in Glasgow, Scotland, where Gore said the world is finally waking up to the 'dire' threat of climate change [File: Phil Noble/Reuters]

Al Gore, the former vice president of the U.S. and the chairman of Generation Investment Management LLP, said the world is witnessing a sustainability revolution and warned that investors caught on the wrong side of history will face losses.

“We now have a subprime carbon bubble of $22 trillion, based on an absurd assumption that all of those carbon fuels are going to be burned,” Gore said in an interview Wednesday with Bloomberg Television’s Francine Lacqua. “They’re not going to be, especially because the new renewable sources of electricity are much cheaper now.”

He said that once the risks are “internalized,” then “it’s going to affect the value of all these assets.”

Gore, who spoke from Glasgow, Scotland, where the COP26 climate summit is unfolding, made similar comments almost a decade ago. But the world is now waking up to the “dire” threat of climate change, he said. As a result, such predictions are starting to resonate more as the urgent need for decarbonization sinks in.

Gore spoke as the focus of COP26 turned its attention to the financial industry. The day started with an announcement from the Glasgow Financial Alliance for Net Zero that firms representing $130 trillion in assets have now committed to net-zero carbon emissions by the middle of the century.

“I think we’re in the early stages of a sustainability revolution that’s the biggest opportunity in history,” Gore said. “And those who don’t recognize that and adapt to it are in commercial risk. They’re going to be left behind.”

Gore’s 2006 documentary, “An Inconvenient Truth,” brought the issue of climate change into the awareness of the general public. The commitments being unveiled in Glasgow suggest that there’s been a genuine shift in sentiment and that there will also be the necessary follow-through, he said. “I don’t think there’s going to be a letdown after this,” Gore said.

Source: Bloomberg