For financial professionals in Finland

Governments must lead on climate action

In the first "Climate Conversations" post, Adrienn Sarandi and Bhaskar Sastry argue that the world is sleepwalking into Climageddon without government leadership on targeted subsidies and establishing a carbon price.

Adrienn Sarandi

Adrienn Sarandi

Director of Fixed Income ESG


Bhaskar Sastry, CFA

Bhaskar Sastry, CFA

ESG Content Manager


3 Jan 2023
1 minute read

Key takeaways:

  • The IPCC believes it may be possible to limit temperature rise to 1.5°C, or well
    below 2°C, above pre-industrial levels by the end of this century but that it
    would require deep emissions reduction this decade and various technologies
    to remove carbon dioxide from the atmosphere. Yet, greenhouse gas emissions
    have been rising rather than falling while emissions reduction technologies are
    in their infancy.
  • We argue that the most potent levers available to decarbonise the global economy on time are expanding mandatory and sufficiently high carbon prices and appropriate subsidies implemented by governments around the world.
  • Only governments have the power to mobilise private capital and influence consumer behaviour sufficiently quickly through the right financial incentives. Hence, governments urgently need to develop a detailed strategy for decarbonisation to provide a clearer outlook for consumers and companies and to create long-term opportunities for investors to finance the transition.

The new “Climate Conversations” series offers perspectives on climate change and the energy transition.

A climate of extremes

Unprecedented, record, catastrophic, destructive, deadly. Many pointed adjectives can be used to describe the impacts of climate change around the world in recent months. Between the floods that ravaged Pakistan, the growing intensity and frequency of wildfires on all continents, the droughts in Europe, China and Africa and innumerable heat waves, climate change is now hitting hard across the globe.

pdf-promo-esg-in-corporate-credit-change-is-active

The impacts of these climate extremes are not short-lived and transitory but long-lasting and cumulative, with the poorest most at risk. Approximately half the global population is ‘highly  vulnerable’ to climate change and millions already face starvation and water shortage. Madagascar has experienced the “world’s first climate change famine” according to the World Food Programme.

We are in an emergency situation, a “Code Red” for humanity, according to the Intergovernmental Panel on Climate Change (IPCC), a United Nations-led panel of scientists representing 196 countries.

The full article is available here.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

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Adrienn Sarandi

Adrienn Sarandi

Director of Fixed Income ESG


Bhaskar Sastry, CFA

Bhaskar Sastry, CFA

ESG Content Manager


3 Jan 2023
1 minute read

Key takeaways:

  • The IPCC believes it may be possible to limit temperature rise to 1.5°C, or well
    below 2°C, above pre-industrial levels by the end of this century but that it
    would require deep emissions reduction this decade and various technologies
    to remove carbon dioxide from the atmosphere. Yet, greenhouse gas emissions
    have been rising rather than falling while emissions reduction technologies are
    in their infancy.
  • We argue that the most potent levers available to decarbonise the global economy on time are expanding mandatory and sufficiently high carbon prices and appropriate subsidies implemented by governments around the world.
  • Only governments have the power to mobilise private capital and influence consumer behaviour sufficiently quickly through the right financial incentives. Hence, governments urgently need to develop a detailed strategy for decarbonisation to provide a clearer outlook for consumers and companies and to create long-term opportunities for investors to finance the transition.