The financial crash will look like a “picnic” if the “carbon bubble” bursts, a former energy secretary has warned, as he called for the MPs’ pension fund to stop investing in fossil fuels.
Sir Ed Davey said the Parliamentary Pension Fund should set an example in a programme of “decarbonising capitalism” and warned that the value of traditional oil and gas firms could collapse as the economy moves to cleaner forms of energy.
More than a third of sitting MPs have called for the Parliamentary Pension fund to review its holdings and commit to phase out fossil fuel investments, in a campaign led by Green MP Caroline Lucas with cross-party backing.
Sir Ed told the Press Association it was time for “radical” action, adding: “We do have an emergency and that requires funds to move quickly.”
Pension funds were part of the problem because they invest heavily in supposedly safe blue chip companies.
While that might result in a substantial pension pot, people “won’t have a decent place to retire in because climate change will have happened”.
The Kingston and Surbiton MP added: “What we are looking for is how do we get from where we are now to where we need to be in a smooth way, a smooth transition.
“If we don’t start talking about it now, the transition will come and it will be a bubble bursting and it will make the 2007-8 financial crash look like a picnic.”
Brighton Pavilion MP Ms Lucas said it was “morally unacceptable” for MPs to contribute to climate change-driven disasters by investing parts of the £700 million fund in fossil fuel companies.
“It’s time MPs joined the majority of UK universities, numerous faith groups and a growing number of local authorities in saying we can no longer use our pension funds to gamble with people’s lives and with the future of the planet,” she said.
“The climate emergency demands that all pension funds divest from fossil fuels and invest in positive solutions to the climate crisis.”
Sir Ed will lead a debate in Parliament on the issue on Wednesday.