Macroclimate® 50
Public Company Owners of Coal-Fired Power Plants in Developed Markets, China, and India
Photo: Typical coal-fired power plant (iStock by Getty Images)
Climate experts have told us that the #1 problem is coal power plants. That’s why we’ve compiled The Macroclimate® 50 – an exclusion list of the 50 largest public-company owners of coal-fired power plants in Developed Markets plus China and India.
We believe that divesting these 50 companies from an investment portfolio — as well as the owners of coal reserves supplying such plants (The Carbon Underground) — to be a key part of any environmentally-responsible investment strategy.
Consequences of Burning Coal and Other Fossil Fuels
Climate experts predict that burning even just current – that is, known and extractable – fossil fuel reserves would lead to dramatic global warming. For example, in a poll of climate scientists, 92% of expert panelists believe that if all of the world’s current fossil fuel reserves are burned, it is likely or very likely that Earth’s temperature will increase to levels not experienced for millions of years (≥3°C of warming). (Note that the data set referenced is aged and may be materially different if based upon more recent data.)
Unfortunately, the expected consequences of ≥3°C warming are equally dramatic. We expect not only destruction of delicate ecosystems – some of which are critical to the world’s food supply – but also increased frequency and intensity of extreme weather events like floods, cyclones, heat waves, droughts and fires.
Other outcomes are less certain but have high consequence. These potential “surprises” include large-scale singular and irreversible events such as rapid melting of the Greenland and/or West Antarctica ice sheets, which would result in significantly higher and faster sea level rise than currently expected.
Photo: The Upernavik Ice Stream in northwest Greenland (Nature)
Figure 1: ABRUPT WARMING IS NOW OCCURRING IN GREENLAND
The #1 Problem is Coal
From a climate science perspective, owners of coal-fired power plants – The Macroclimate 50 – would be the first highest priority target for divestment.
A majority of expert panelists (64%)1 in 2014 believed that retiring (or sequestering) coal-fired power plants would be the single most effective use of major investments to limit global warming (Figure 2) and the vast majority (84%) expected that coal-fired power plants alone will contribute between 25% and 60% or more of gross carbon emissions to the atmosphere between then and 2020. This is due in large part to the proliferation of new coal plants in China and in India. China and India have increased from less than a third of The Macroclimate® 50 companies to now making up one half of the list. And this does not include state-owned utilities in these countries which are among the largest owners and operators of coal-fired power plants worldwide.
Figure 2: SCIENTISTS IDENTIFY COAL-FIRED POWER PLANTS AS THE BIGGEST PROBLEM
Expert panelists were pre-screened to ensure they have relevant expertise. Average h-index scores (highlighted in orange) provide an approximate measure of a scientist’s cumulative research impact – a metric for assessing the relative expertise of the participants who selected a given answer. As a point of reference, h ≈ 12 might be a typical value for advancement to tenure at major research universities; membership in the U.S. National Academy of Sciences may typically be associated with h ≈ 45 and higher (Hirsch, PNAS, 2005).
The data set referenced is aged and may be materially different if based upon more recent data.
Data Sources and List Methodology
Macroclimate periodically compiles extracts from Global Coal Plant Tracker, associates owners of the largest operating plants (including planned and new construction) in the relevant geographic areas with their respective publicly-traded companies, excludes companies rapidly phasing out their coal fleet in alignment with the Paris Agreement, and then ranks the remaining companies by their total coal-fired energy capacity (MWe). Since The Macroclimate 50 is constructed and maintained using open access data, the list is verifiable by others.
Vision Prize® Poll of Climate Scientists was a research partnership that captures scientific meta-knowledge on climate risks and solutions, in collaboration with the environment and energy website of Physics World and researchers at Carnegie Mellon University. A three-year study of the expert opinions of 340 climate scientists worldwide was completed in December 2014. Members of Macroclimate’s Quantitative Research Team served as project leaders for this study, which inspired — and inform the investment strategy of — Macroclimate’s Wealth Management service.
Disclosures & Permitted Uses
While care has been taken to ensure the accuracy of the Macroclimate 50 list, Macroclimate LLC does not guarantee the accuracy or completeness of information contained herein or that it will be current at all times. The list has previously been provided publicly for personal, informational, and non-commercial use on the condition that it is unmodified and attributed to macroclimate.com. Any other use of these materials without prior written permission is prohibited. Please see Licensing below for commercial use.