The Inevitable Policy Response Forecast: Optimistic or Realistic?

Climate Risk Podcast

Hear from Dr. Jakob Thomae, Project Director for the Inevitable Policy Response, as we discuss their latest forecast and what it means for the transition to net-zero.

Scenario analysis is the natural tool for anyone wanting to understand how climate-related risks might evolve over coming decades. The vast majority of climate scenarios, regardless of who produced them or what level of warming they predict, tend to report similar levels of physical risk over the next couple of decades or so. However, predictions about transition risk tend to be quite different between scenarios.

This episode focuses in on the transition, and in particular the extraordinary work being done by the Inevitable Policy Response (IPR) to figure out the most likely course of the transition to net zero. We’ll explore:

· The IPR’s surprisingly optimistic forecast, and they believe the world might look like by the end of the century;

· The methodology behind their forecast, and how it differs from the scenarios produced by other groups; and

· What this forecast means for risk and finance professionals.

To find out more about the Sustainability and Climate Risk (SCR®) Certificate, follow this link: https://www.garp.org/scr

For more information on climate risk, visit GARP’s Global Sustainability and Climate Risk Resource Center: https://www.garp.org/sustainability-climate

If you have any questions, thoughts, or feedback regarding this podcast series, we would love to hear from you at: [e-mail]

Links from today’s discussion:

• The Inevitable Policy Response: https://ipr.transitionmonitor.com/
• Theia Finance Labs (formerly known as the 2° Investing Initiative): https://theiafinance.org/
• Jakob’s first book, ‘The Kill Score: On the Trail of Our Ecological and Social Footprint’: https://rb.gy/ydnxvu
• Paris Agreement Capital Transition Assessment (PACTA): https://pacta.rmi.org/
• The International Energy Agency (IEA): https://www.iea.org/
• How Bad are Bananas? by Mike Berners-Lee: https://howbadarebananas.com/
• Jakob’s second book, ‘The Little Book of Big Risks: From Atomic Bombs to a Zombie Apocalypse’: https://rb.gy/8lk1no

Speaker’s Bio

Dr. Jakob Thomae, Project Director, Inevitable Policy Response

Jakob Thomae is one of the leading global experts on sustainable finance and long-term risks. In June 2023, Jakob was appointed Project Director for the Inevitable Policy Response (IPR), a climate transition forecasting consortium commissioned by the Principles for Responsible Investment. The IPR helps investors navigate the risks and opportunities arising from climate policy acceleration, volatility and transition.

Jakob is the co-founder of Theia Finance Labs (formerly known as the 2° Investing Initiative) where he currently serves as Research Director. Jakob is also Professor in Practice at SOAS, University of London, where he teaches a Green Finance course. His recent book "The Kill Score” explores the impact of sustainability on human lives.

Jakob has served as advisor to central banks around the world including the Japanese Financial Services Agency, the Brazilian Central Bank, the Bank of Thailand, the Bank of England, the Bundesbank, the Dutch Central Bank, and EIOPA. He holds a PhD in Finance from the Conservatoire National des Arts et Metiers.