Fossil fuel companies should be made to invest as much in carbon storage as they do in exploring for new coal, oil and gas reserves, according to academics from Oxford University.
Governments also need to massively tilt the balance to ensure the development of renewable and other “clean” energy technologies to allow the world to transition to a low carbon economy.
Myles Allen, a professor of geosystem science at Oxford, said the Bank of England and financial regulators could potentially consider sequestration - capturing Co2 - as a new asset class to be monitored and valued.
“If they are going to dig this stuff up then they are going to have to show where they are going to store it,” he argued, saying it was unfair to imagine such schemes should be paid for by public subsidy.
Allen believes that carbon, capture and storage (CCS) should be made mandatory so oil companies such as Shell are made to demonstrate exactly where the carbon from any new planned production would be buried. “This would effectively set a price on carbon,” he explained.
Allen was speaking at a briefing on a new Oxford Martin Safe Carbon Investment initiative which he says has been formed to provide “a robust, evidence-based approach to divestment”.
The academics, who also include Corinne Le Quéré, a professor of climate change science at the university of East Anglia, want to develop a set of principles that could be used by all investors keen to keep the world’s climate at safe temperatures.
They accept that all the coal, oil and gas currently found cannot be burned if the earth’s temperatures are not to grow beyond a further 2C. Companies such as Shell are already developing CCS prototypes but on a very small scale and are demanding subsidies to build more.
An official research programme will be formally launched in Paris next Wednesday.
