Much of this coal and oil may have to be left in the ground to combat climate change, according to the Environmental Audit Committee (EAC)The Committee also hits out at the lack of green finance.Less than half the £200bn needed to deliver emissions cuts by 2020 is in place they say.A number of studies in recent years have warned that stock markets around the world have overvalued companies with large holdings of coal, oil and gas.The problem stems from the fact that countries including the UK agreed at a UN meeting in Mexico in 2010 to limit global temperature rises to 2C.To achieve this, economists including Sir Nicholas Stern have calculated that between 60 and 80% of existing reserves of fossil fuels will need to remain in the ground, unburned.Today's report from the House of Commons Environmental Audit Committee (EAC) reiterates these warnings."The UK Government and Bank of England must not be complacent about the risks of carbon exposure in the world economy," said Committee chair Joan Walley MP."Financial stability could be threatened if shares in fossil fuel companies turn out to be overvalued because the bulk of their oil, coal and gas reserves cannot be burnt without further destabilising the climate," she said.Global problemThe MPs say that the Bank of England's Financial Policy Committee should regularly consult with the independent Committee on Climate Change (CCC), to help it monitor the risks to financial stability.They also call for new carbon reporting arrangements, so that there is greater clarity from corporations about their holdings and investments.These concerns were echoed by the UN's climate chief, Christiana Figueres.Speaking to the press in London, she said that the certainty of the science about climate change demanded that companies reduce their holdings of fossil fuels."Those corporations that continue to invest in new fossil fuel exploration, new fossil fuel exploitation, are really in flagrant breach of their fiduciary duty because the science is abundantly clear that this is something we can no longer do," she said.Another new European study says that the carbon bubble risks for the UK's pension sector are far higher than for the banking sector.The report, commissioned by European Greens says that British pensions have a "high" exposure to carbon.They say that out of the 23 large EU pension funds that were examined in the study, the UK's Universities Superannuation Scheme has an "overwhelmingly large" amount of carbon risk in its portfolio."The result is sobering," said Green MEP Reinhard Butikofer."With over 1 trillion euros in high-carbon assets, we have identified that the carbon bubble is a significant risk, particularly for a number of EU Member States and EU financial institutions. Investments in fossil fuel companies could therefore quickly turn into fool's gold."Green bankingAs well as the carbon bubbles, the EAC report criticises the lack of investment in energy infrastructure to meet national and international targets.They say that less than half the £200bn that is needed to meet carbon reduction targets by 2020 is in place.However a spokesman for the Department of Energy and Climate Change (Decc) said that the picture of green investment in the UK was positive."Record investments of around £40bn are expected in renewable electricity generation projects up to 2020, building on substantial investment announced since 2010," he said."In total, these reforms will help to support up to £110bn of total investment and up to 200,000 jobs across the electricity sector by 2020."We have set the conditions to attract investment into our energy sector, which will keep the lights on for years to come."The Committee says the Coalition's Green Investment Bank has made a good start in areas such as financing low-energy street lighting around the UK that will be repaid from the savings that local authorities will make.However they criticise the fact that it does not yet have adequate power to borrow in order to leverage and enlarge its investments."It has funding it can add value to but it is not able to go out and raise bonds or borrow on the market and work as a proper bank," said Dr Alan Whitehead MP, a member of the EAC."That change clearly needs to happen at an early stage. The leverage that could be obtained from that is far greater."However a spokesman for the Department of Business Innovation and Skills (Bis) said that this is something for the future."It is something we are keeping under review in the longer term as levels of public sector debt begin to fall."(BBC)ANN.Az