“If investors make valuation errors based on the divestment campaign and relinquish high-performing stocks, a breach of the Corporations Act may have occurred,” RMIT University economics professor Sinclair Davidson wrote.

“There is a potential role for the Australian Securities and Investment Commission to examine whether the stigmatisation of the fossil fuel sector via the divestment campaign is a breach of the Act.

“The divestment campaign would amount to an unlawful secondary boycott if environmental activists were covered by those laws. They are seeking to restrict coal mining in Australia by targeting a critical supplier to the sector.

“The bottom line is that the divestment campaign is environmental activism dressed up as investment advice.”

The MCA paper was released yesterday after Paulson, a former US treasury secretary who famously claimed that the US housing market was nearing a turnaround in 2007 ahead of the subprime mortgage crisis-triggered recession in 2008, wrote a weekend opinion piece in the New York Times that warned of a “climate bubble that poses enormous risks to both our environment and economy”.

Paulson and former New York mayor and entrepreneur Bloomberg are both co-chairs of the Risky Business initiative, which has carbon emitters in its sights.

“An independent risk assessment will combine existing data on the current and potential impacts of climate change with original research that will quantify potential future costs,” RB said on its website.

“The results, to be released in the summer of 2014, will reveal the likely financial risk the US faces from unmitigated climate change.”

Davidson was concerned about new and apparently sophisticated arguments against fossil fuels and “pseudo-economic justification for divestment”

“The concerted, well-financed and internationally coordinated campaign against fossil fuel producers carries with it great dangers and the potential to impose huge costs on the Australian economy,” he said.

“To the extent that economic resources are redirected from productive use to counter this risk, the environmental movement has already succeeded in raising the cost of doing business.

“The targets of the divestment campaign – the coal industry, the finance industry and the Australian economy in general – will have to increase expenditure on maintaining and enhancing their corporate reputations and promoting Australia as an investment destination.”