(Episode 592; 14 minutes 58) Resource companies have enjoyed a good run on the share market lately. Yet they could suffer, not just from the prospect of a super-profits tax, but also from some form of emissions trading scheme. Likewise for airlines and transport companies. Some form of market penalty for heavy use of carbon is inevitable at some point, despite short term political bickering.
Phil Preston from Seacliff Consulting is the coauthor of a new paper "Carbon-Induced Financial Disruption" that looks at the impact measures to limit climate change will have on the finance markets. He argues that those changes probably haven't been factored in to share prices, and we can expect some form of market correction.
At the moment perhaps investors, business leaders and some politicians are ignoring the issue and hoping it will go away. But, as Phil says in this edition of BTalk, we can't carry on the way we have and we need to assume there will be some strict regulation soon. That should be considered in our longer term investments, including our retirement funds.