THE INEVITABLE POLICY REPONSE
The "Inevitable Policy Response" is a project lead by ETA and commissioned by the UN PRI. It brings together key research into forecasting forceful policy responses by the 2025 Paris Agreement Agreement Ratchet and puts those responses into economic and investment portfolio contexts. What is “Inevitable” is further policy response as the realities of climate change become increasingly apparent.
Government action to tackle climate change has so far been highly insufficient to achieve the commitments made under the Paris Agreement, and the market’s default assumption appears to be that no further climate-related policies are coming in the near-term. Yet as the realities of climate change become increasingly apparent, it is inevitable that governments will be forced to act more decisively than they have so far.
The question for investors now is not if governments will act, but when they will do so, what policies they will use and where the impact will be felt. The IPR project forecasts a response by 2025 that will be forceful, abrupt, and disorderly because of the delay.
In anticipation, PRI, Vivid Economics and Energy Transition Advisors are building a Forecast Policy Scenario which lays out the policies that are likely to be implemented up to 2050 and quantifies the impact of this response on the real economy and financial markets.