Finance
Stranded assets are investments or assets (often in the fossil fuel industry or other high-carbon sectors) that lose value or become unusable before the end of their expected life due to changes in the market or regulatory environment. For example, a coal-fired power plant could become a stranded asset if it’s shut down early because of strict climate policies or because renewable energy and storage make it uncompetitive. Investors are increasingly wary of stranded asset risk in an era of decarbonization, as assets like oil reserves, pipelines, or old power plants might not yield expected returns. In contrast, renewable energy assets are generally seen as less likely to strand because they align with the long-term transition to cleaner energy, though they face their own risks like technological obsolescence.