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Carbon 'bubble' could cost global economy trillions

A rapid reduction in demand for fossil fuels could see global economic losses of $1-4 trillion by 2035 according to a new report.

Energy efficiency and low carbon technology could cause the downturn, even if governments fail to take new steps to meet the Paris climate goals.

The resulting "carbon bubble" could cause losses larger than the 2008 financial crisis, the authors say.

The US and Canada would be the biggest losers, the study finds.

According to the International Energy Agency (IES), the world invested around $700bn in oil, gas and coal in 2016.

While there has been a growing movement for divesting from shares in fossil fuel companies in recent years, the sector still accounts for 6% of global stock markets and 12% in the UK.

Research has often focussed on how these investments would be affected if the world takes new action to limit the global rise in temperatures to well under 2C as agreed in Paris in 2015.