Book Chapter

Stranded Assets

Details

Citation

Park H (2024) Stranded Assets. In: Fiorino DJ, Eisenstadt TA & Ahluwalia MK (eds.) Elgar Encyclopedia of Climate Policy. Political Science and Public Policy 2024. Cheltenham: Edward Elgar Publishing, pp. 198-202. https://doi.org/10.4337/9781802209204.ch37

Abstract
Even though any types of unexpected risks can render stranded assets— stranded resources (beyond financial resources) that cannot be used or developed further— the concept has been increasingly linked to environmental issues, particularly climate change. This entry looks at the definition and the causes of stranded assets, and the subsequent effects. Stranded assets have a direct economic impact on market actors, particularly investors. In addition, there is liability risk where economic losses from stranded assets increase the liability risk imposed on financial supervisors and investors. When climate-related stranded assets cause economic losses, asset managers could get sued for a violation of their fiduciary duty. On the other hand, fiduciary duty can be a reason why some remain investing in fossil fuel assets to achieve a high financial performance in the short term. Hence, litigation can be both a result and a cause of stranded assets. In addition, this entry introduces the distributional effects of stranded assets from a just transition perspective.

Keywords
Stranded assets; Liability; Climate change; Markets; Fiduciary

StatusPublished
Title of seriesPolitical Science and Public Policy 2024
Publication date31/12/2024
Publication date online30/04/2024
PublisherEdward Elgar Publishing
Place of publicationCheltenham
ISBN9781802209198
eISBN9781802209204

People (1)

Dr Hyeyoon Park

Dr Hyeyoon Park

Lect. in International Politics, Politics