The world's financial markets could be creating a "carbon bubble" by over valuing the fossil fuel assets of large companies say MPs.
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 problem
The 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.
Comments