Dear all
We invite you to our PDW on:
Stranded Assets in the Non-renewable Sector
Program Session #: 360 | Submission: 13339 | Sponsor(s): (ONE)
Registration Code: PDW4JZAP
Scheduled: Saturday, Aug 6 2016 1:00PM - 2:30PM at Anaheim Marriott in Orange County Ballroom 2
The agreement at COP21 to take action to limit a global temperature increase to 2°C with a further ambition to keep it below 1.5°C has grave implications for the non-renewable sector.
The fossil fuel industry in particular faces the risk that its assets will become stranded. Existing reserves will no longer be exploitable and new reserves will have to be abandoned. A stranded asset valuation approach treats the firm as if it has a limited life whereas the non-stranded asset valuation approach considers the firm in perpetuity. The PDW will provide insight on the theoretical and empirical valuation of the stranded assets.
This PDW seeks to examine the topic of stranded assets, the length of the fossil fuel industry's remaining life, and consequently, the difference between the stranded asset valuation versus the non- stranded asset valuation and thus, the traded price of any fossil fuel dependent firm. The strategy of the transition from fossil fuels towards renewable sources of energy will be an important consideration here as will be the adjustment costs and infrastructure requirements involved in the transition.