UK warned of 'carbon bubble' threat

Industry group RenewableUK claimed a British legislators’ report warning of a “carbon bubble” and the need for a big ramp-up in clean-energy investment should act as a wake-up call for the country’s government.

The UK House of Commons Environmental Audit Committee said a potential bubble – caused by overvaluation of fossil fuel-based businesses in an era of decarbonisation – poses a threat to the country’s financial stability.

It also warned of a £100bn ($167bn) shortfall in the investments needed by 2020 if the UK is to hit its carbon reduction goals.

Maria McCaffery, chief executive of RenewableUK said the report underlines the need for the UK to stick to planned escalations of the carbon price floor.

She added:  This report should act as a clarion call to the Government to ensure that we’re not backing the wrong horse, and the UK should be committing to further investment in low carbon technologies.

"This cross-party grouping of MPs has come to a very clear conclusion that relying on fossil fuels is not just bad for the environment, it could be damaging to financial stability.”