Are you concerned about the impact BP’s troubles are having on not only the environment but also your pension? Me too.
This episode highlights how our world is inextricably entwined with fossil fuel. The environmental catastrophe looks set to be followed by a financial one for UK pension funds. For many years, BP have been a core holding in many pension funds, paying a healthy and generally consistent dividend. Will this continue given the position the company now finds itself in? Time will tell.
What it does illustrate is that the linkages throughout our economic system mean that there has not been a level playing field for other energy sources. The enormous amounts companies like BP, Exxon and Shell invest each year in R&D, exploration, production and so on cannot hope to be matched by the nascent renewable sector and consequently we have long been in the position where the argument of unit cost (of electricity, for example) is a sure-fire trump card for the fossil fuel lobby.
Maybe this is the point at which the tide begins to turn? Barack Obama certainly seems to be thinking the same way, perhaps if only to galvanise the oil dependent US towards a greener and more competitive future. This is the big picture and who know how it will play out.
However, one thing is for certain: if you want to put your pension money somewhere safer than what was, until recently, one of the safest investments around, you need look no further than PV. Your income stream is guaranteed for 25 years, is index-linked to RPI and comes tax free.
What’s more you will have taken a step away from reliance on the vicissitudes of energy markets which are only likely to become more volatile as fossil fuel companies take greater and greater risks to extract harder to access reserves.