Fossil fuel implications from agency reports on energy and climate change in the lead up to Paris

Alert date: 20 July 2015

In anticipation of the UN’s conference on climate change (COP21), the International Energy Agency (IEA) and OECD have released reports focusing on the global energy outlook and offering policy recommendations for improving the likelihood of achieving the 2°C goal. The IEA believes current emission reduction targets will not be sufficient to achieve the goal, and have proposed a new ‘bridge scenario’, signalling additional strategies by 2025 will be needed.

Regnan has drawn a number of conclusions from the reports. For example, key sectors impacted by energy market transformations from decarbonisation include: diversified minerals, energy, utilities, transportation, and to a lesser extent banks.

Proportional inter/intra sectoral risk is dependent on:

  • The level of product diversification;
  • Production cost curves; and
  • Other mitigating factors such as contract terms and GHG emissions abatement (carbon sequestration).

The full report is available to Regnan clients.

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