At the current pace of research and development, global oil will runout 90 years before replacement technologies are ready, says a newUniversity of California, Davis, study based on stock marketexpectations.
The forecast was published online Monday (Nov. 8) in the journalEnvironmental Science & Technology. It is based on the theory thatlong-term investors are good predictors of whether and when newenergy technologies will become commonplace.
"Our results suggest it will take a long time before renewablereplacement fuels can be self-sustaining, at least from a marketperspective," said study author Debbie Niemeier, a UC Davis professorof civil and environmental engineering.
Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoralresearcher, set out to create a new tool that would help policymakersset realistic targets for environmental sustainability and evaluatethe progress made toward those goals.
Two key elements of the new theory are market capitalizations (basedon stock share prices) and dividends of publicly owned oil companiesand alternative-energy companies. Other analysts have previously usedsimilar equations to predict events in finance, politics and sports.
"Sophisticated investors tend to put considerable effort intocollecting, processing and understanding information relevant to thefuture cash flows paid by securities," said Malyshkina. "As a result,market forecasts of future events, representing consensus predictionsof a large number of investors, tend to be relatively accurate."
Niemeier said the new study's findings are a warning that currentrenewable-fuel targets are not ambitious enough to prevent harm tosociety, economic development and natural ecosystems.
"We need stronger policy impetus to push the development of thesealternative replacement technologies along," she said.
Source: University of California - Davis