The carbon bubble is a hypothesized bubble in the valuation of companies dependent on fossil-fuel-based energy production, because the true costs of carbon dioxide in intensifying global warming are not yet taken into account in a company's stock market valuation.Currently the price of fossil fuels companies' shares is calculated under the assumption that all fossil fuel reserves will be consumed.
A planned and orderly transition away from dependence on fossil fuels could prevent a disruptive "bursting of the carbon bubble" and prevent future generations paying the cost.