Climate-related asset stranding across ownership and time horizons: Insights from the US and China

• In Event: Environmental Sociology Section Roundtables
  In Refereed Roundtable (60 minute): Table 5: Political Economy, Capitalism, and Markets

Abstract

Climate change and our mitigation efforts will lead to disruptive asset stranding in carbon-intensive sectors and ecologically exposed communities. While the current literature explains the nature and impacts of stranding risks and realities, it does not interrogate countries' uneven responses. This paper works toward a comparative political economy of climate-related asset stranding. First, we draw a distinction between rapid stranding, exemplified by the influential “carbon bubble” scenario, and slow stranding, like market shifts away from fossil technologies. We argue that a rapid carbon bubble is unlikely, and even if it occurs, countries with sufficient resources would likely bail out asset holders, averting worst-case outcomes. By contrast, slow-moving asset stranding is far more likely, with responses varying by countries’ basic economic setup, including their asset ownership regime. To illustrate this argument, we draw from comparative case studies of asset stranding politics in the US and China.

Authors

• Daniel Driscoll, University of Virginia

• Nils Kupzok

• Mathias Larsen