Current climate policies may result in 3.4C of warming above pre-industrial levels by 2100, according to the UN. The increased exposure to physical climate risks will trigger demands from the public, investors, and businesses for action.
In an “inevitable policy response,” policy-makers in the world’s major economies would have to implement strict new climate policies, says an article in edie.
The policies could include net-zero targets of 2050 or sooner, with shorter-term and sector-specific roadmaps, carbon pricing, and tax mechanisms. Legal processes may specifically address how to deal with businesses that damage the environment.
These policies could result in significant destruction of value of as much as 43% by 2030 in industries such as large oil and gas, metals and mining, and heavy industry. [A September 2019 report by Carbon Tracker warned that major oil and gas companies could lose $2.2 trillion on ‘stranded’ assets by 2030]
Coal, building materials, cattle, soy, and automaking industries could also erode much of their value in the coming decade due to the new, more stringent policies.
However, valuations of those companies that quickly pivot to a low-carbon business model could surge higher by a third in the next decade. Electric vehicle makers, for instance, could gain as much as 108%.
The new policy changes may be closer than we think. World leaders, business representatives, and activists are currently discussing these, and other sustainability issues at COP25 in Madrid.
Read the edie article HERE.
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