COP26: Bridging The Gap Of Climate Ambition

Document summary

Following revisions of national commitments during recent climate summits, it is estimated that the resulting global trajectory will lead to a 2.9°C warming ? a level far short of the Paris target.

To bridge the gap, collective efforts to reduce greenhouse gas (GHG) emissions will need to improve significantly and must include:

• policy interventions to limit GHG emissions;
• profound economic transformations in fossil fuel consuming sectors
• massive asset reallocation, with significant implications for investors in relation to risk management, asset prices and investment strategies.

This paper examines the “ambition” gap between countries’ official commitments to limit GHG emissions and their requirements to reach the Paris Agreement objective as well as the key levers available to meet that goal and some likely trends to anticipate in this context.