Companies that do not plan for the inevitable low-carbon economy resulting from climate action sparked by the Paris Climate Change Agreement risk considerable financial losses and drops in value, argue a pair of leading economists from the Grantham Research Institute on Climate Change and the Environment.

This paper seeks to contribute to a re-framing of the debate on the equitability and ambition of actions to address climate change. It examines a sample of seven ‘burden-sharing’ approaches to setting mitigation targets which have been proposed during discussions about a new international agreement on climate change.

The ongoing review of the UK’s Fourth Carbon Budget is closely linked to the debate over the impact that domestic climate change policies can have on the competitiveness of businesses. Notably, there are concerns that, if the UK implements more ambitious climate policies than its trading partners, carbon-intensive producers might relocate.