Professor Nicholas Stern of the London School of Economics and the Carbon Tracker think-tank has come up with some damning evidence about the future of carbon trading. HSBC, Citibank, Standard and Poor's, the International Energy Agency and the Bank of England have also recognised the fossil fuel price as likely to collapse. It is possible their CO₂ "bubble" of investment will soon burst. If nations meet existing carbon reduction targets, then two-thirds of fossil fuels' reserves will have to be left underground.

The price will collapse and coal prices in, for example London, would be the first to go. In similar investments the New York stock exchange has 215 gigatonnes of CO₂ related investments (largely oil-related). The estimate is that $6 trillion have been wasted on fuel reserves over the next 10 years, if countries bite the bullet and keep to the 900 gigatonne limit for CO₂ emissions. This of course is the figure given as necessary for our planet to remain below the critical 2°C temperature rise.

The publically listed companies involved in investments are now going to be sorely tempted to pull out of their commitments. Regulators around the world are likely to be involved. Continued investment is jeopardised by the possible actions of Chinese, American and European governments. Those investors who remain "off-side" as far as fossil fuel investment is concerned are gambling that the political promises about carbon emissions will be broken.

Jens Peers of Mirova, part of €300bn asset managers Natixis, relates his opinion, "It is shocking to see the report's numbers, as they are worse than people realise. The risk is massive, but a lot of asset managers think they have a lot of time. I think they are wrong." By 2015, "it will be too late for them to take action."

As far as pension funds are concerned, there could be some losses involving many people if investment managers don't act long before 2015. China seems assured to be stopping its use of US and Australian coal. With such risks of losses, most companies involved are likely to pull out of fossil fuel commitment as far back as possible.