The Guardian campaign for ethical investment (Felix Salmon, 13 April) aims to stop fund managers investing in any fossil fuels. This ignores the need to discriminate between them. The greatest threat of a dangerous rise in global temperatures comes from the world’s reliance on burning coal. China and India, for instance, are building three huge coal-fired power stations a week. In the short or medium term, the most effective substitute for coal is gas. The US has recently reduced its carbon emissions more than any other major country, because it has switched from coal to gas through exploitation of its vast deposits of shale gas.
Gas can only be a transitional solution because of its carbon content, and there will also be environmental or geological problems in different places. But gas is less than half as polluting as coal and can give us a breathing space, which we need to develop more efficient sources of carbon-free power.
Dick Taverne
Liberal Democrat, House of Lords
• That the shares of oil and gas companies have significantly underperformed on the market in recent years may help make the case for divestment, as Felix Salmon says. But there are three reasons for caution.
First, don’t forget past performance isn’t a guide to future performance. Second, while the halving in oil prices since last June has obviously hit the performance of the sector, some companies anticipate a major recovery in prices. One is Shell, already Britain’s largest company, which agreed last week to buy smaller rival BG Group for £47bn. This deal shows Shell is confident oil prices are going to bounce back. Third, Shell’s BG purchase is expected to trigger a fresh wave of deals in the oil and gas sector. The shares of potential targets will rise accordingly. There are big fees for the investment banks behind these deals.
Dr Alex May
Manchester
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