Global Climate Service: Divergent policies & the cost of uncoordinated action

The Global Climate Service quantifies the macroeconomic impacts of five climate scenarios against a stated policies baseline. These scenarios help businesses understand the trade-offs and implications of climate mitigation.

This quarter our new scenario – Divergent Net Zero – demonstrates the cost of uncoordinated policy action. Divergence in mitigation policy across sectors results in a higher burden on consumers relative to industry. Higher taxes than in Net Zero and initially inelastic commodity demand cause significant inflationary pressure, eating into profits and household wealth.

What you will learn:

• The scenarios’ emissions pathways lie within the distribution of published climate scenarios. Some of these scenarios are focused on the tail end of the distribution (e.g. Climate Catastrophe and Net Zero) and are therefore suitable for stress testing and risk assessment.
• We use our Global Economic Model to generate these scenarios. This is a hybrid structural model which connects the economy, the energy system and the environment. It provides transparent and rigorous modelling, with clear and accessible findings.