Knowledge Tree
stranded assets
Also known as: stranded carbon assets
Facts (15)
Sources
Energy asset stranding in resource-rich developing countries and ... frontiersin.org Jun 10, 2024 11 facts
referencevan der Ploeg F. and Rezai A. (2020) analyzed the risk of policy tipping and stranded carbon assets in the Journal of Environmental Economics and Management.
referenceA. Heras and J. Gupta's 2024 systematic literature review, 'Fossil fuels, stranded assets, and the energy transition in the global south: a systematic literature review', examines the relationship between fossil fuels, stranded assets, and energy transitions in the Global South.
referenceSovacool B. K. and Scarpaci J. (2016) analyzed the Yasuní–ITT Initiative in Ecuador to provide policy insights on energy justice and the contested petroleum politics of stranded assets in Energy Policy.
referenceMercure et al. (2018) analyzed the macroeconomic impact of stranded fossil fuel assets.
quoteManley et al. (2017) stated: “if stranded assets are a concern for investors,[…] they should be an even bigger concern for many fossil fuel-rich developing countries.”
claimSemieniuk G., Holden P. B., Mercure J. F., Salas P., Pollitt H., Jobson K., et al. (2022) found that stranded fossil-fuel assets translate to major losses for investors in advanced economies, as published in Nature Climate Change.
claimFinancial authorities are urging financial institutions to identify, assess, and manage the risk of climate-related asset stranding to reduce investments in potential stranded assets.
claimThe regional distribution of stranded assets lacks sufficient analysis.
claimDirecting compensation payments toward stranded fossil energy assets may divert financial resources away from investments in renewable energy and other sustainable development initiatives.
claimThe complexity of the fossil resource value chain and uncertain climate policy scenarios hinder the definite quantification of stranded assets.
referenceThe article 'Energy asset stranding in resource-rich developing countries and the just transition - A framework to push research frontiers' cites Van der Ploeg and Rezai (2020) regarding the economics of stranded assets in the transition to a carbon-free economy.
Sustainable Energy Transition for Renewable and Low Carbon Grid ... frontiersin.org Mar 23, 2022 2 facts
claimTo ensure smooth investment in energy transitions, capital must flow urgently to low-carbon solutions to avoid locking economies into carbon-intensive energy systems and to minimize stranded assets, according to Mullen and Dong (2021).
claimNatural gas can substitute for oil and coal in the short to medium term, but this carries the risk of delaying the zero-emissions transition and creating carbon lock-in and stranded assets through the development of natural gas infrastructure.
Transitioning Away from Fossil Fuels - CEBRI cebri.org Sep 22, 2025 2 facts
claimFossil fuel relevance, as a dimension for assessing transition capacity, measures the extent to which a country's economy depends on fossil fuels through production, contribution to Gross Domestic Product (GDP), exports, and exposure to stranded assets.
claimThe first cluster of countries identified by CEBRI is well-positioned to navigate energy and economic transitions, characterized by high economic diversification, strong macroeconomic fundamentals, and robust capabilities to conduct an orderly transition, despite vulnerability to stranded assets and fossil fuel dependence. Examples include the US, China, and Germany.