insights

The Great Carbon Arbitrage

Our analysis shows that phasing out coal is not just a matter of urgent necessity to limit global warming to 1.5°C; it is also a source of considerable economic gain, in terms of net benefits, defined as gross benefits minus gross costs.

IN THE NEWS

Carbon markets are going global

Making carbon markets work better is more of a political challenge than an economic one... The difficulty is building and preserving support for measures that make most economic activities costlier. The same applies to other climate-friendly measures, notes Dr Ben Caldecott of Oxford University: Britain has long failed to raise petrol taxes in line with inflation, costing the government billions.

IN THE NEWS

Investors call for ‘double down’ on energy transition

The overhaul of the global energy system may represent the single biggest investment opportunity in history, reports the Financial Times.

However, as the energy transition becomes more urgent, responsible investors need to think less about these ratings and more about outcomes, says Dr Ben Caldecott.

“What do ESG scores tell us about anything?” he asks. “They are mainly measuring processes and policies — if a company has a policy in place against deforestation it will get a good score, even if it is deforesting.”
 

IN THE NEWS

UK Plans to Label Gas as a Green Investment to Replace Coal

The UK plans to allow some natural gas projects to be labeled as sustainable in its green investment rulebook due to be published later this year.

“Natural gas is not ‘green’ and its inclusion in the EU green taxonomy has completely discredited it,” said Dr Ben Caldecott. “We can have a robust, science-based green taxonomy that is adopted worldwide because it is trusted by the market, thereby supporting UK leadership in green finance, or we can end up with something that is irrelevant..."

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