Exploring the financial and investment implications of the Paris Agreement

A global energy transition is underway. Limiting warming to 2°C (or less), as envisaged in the Paris Agreement, will require a major diversion of scheduled investments in the fossil-fuel industry and other high-carbon capital infrastructure towards renewables, energy efficiency, and other low or negative carbon technologies. The article explores the scale of climate finance and investment needs embodied in the Paris Agreement. It reveals that there is little clarity in the numbers from the plethora of sources (official and otherwise) on climate finance and investment. The article compares the US$100 billion target in the Paris Agreement with a range of other financial metrics, such as investment, incremental investment, energy expenditure, energy subsidies, and welfare losses. While the relatively narrowly defined climate finance included in the US$100 billion figure is a fraction of the broader finance and investment needs of climate-change mitigation and adaptation, it is significant when compared to some estimates of the net incremental costs of decarbonization that take into account capital and operating cost savings. However, even if the annual US$100 billion materializes, achieving the much larger implied shifts in investment will require the enactment of long-term internationally coordinated policies, far more stringent than have yet been introduced.</i

Policy making under uncertainty in electric vehicle demand

The introduction of electric vehicles (EVs) into the passenger vehicle market has, in recent years, become viewed as a primary solution to the significant carbon dioxide emissions attributed to personal mobility. Moreover, EVs offer a means by which energy diversification and efficiency can be improved compared to the current system. The UK government and European Commission have played an active role in steering the development and market introduction of EVs. However, a great deal of uncertainty remains regarding the effectiveness of these policies and the viability of EV technology in the mainstream automotive market. This paper investigates the prevalence of uncertainty concerning the demand for EVs. This is achieved through the application of a conceptual framework that assesses the locations of uncertainty. UK and EU documents are assessed through a review of the published policy alongside contributions from academia to determine how uncertainty has been reduced. This assessment offers insights to decision makers in this area by evaluating the work done to date through a landscape analysis. Results have identified six different locations of uncertainty covering: consumer, policy, infrastructure, technical, economic and social issues