Decarbonisation: the inevitable policy response and investor implications

Combination of stick and carrot policies

Climate change has no doubt cemented its place as a salient issue. However, the world is yet to grapple with the scale of change needed to structurally reduce greenhouse gas emissions.

On their own, new low-carbon technologies are not enough, given the enormous fossil fuel system we have built. BloombergNEF estimates that, on historical trends, it will take 50 to 80 years to decarbonise global electricity generation and even longer to electrify the total energy system. What is the role of policy?  When in place, regulation can have a meaningful impact. EU policies have helped to significantly reduce emissions over the last 15 years, even as global levels have risen, and over 130 countries have now set or are considering net-zero targets by 2050. However, as evidenced...