Key recommendations
We advise that
- HMT should align UK IPO listing rules for fossil fuel companies with the carbon budget.
- HMT should extend the regulatory remit of the FCA to cover the climate-risk related advice offered by investment consultants to their clients.
- HMT should lead a cross-government review of the economic impacts of climate change (including systemic risks and climate tipping points), similar in scope to that undertaken by DEFRA’s recent security assessment on global biodiversity loss, ecosystem collapse and national security to inform climate adaptation policy and departmental funding.
- HMT should review future economic GDP growth assumptions (as used in the SSP’s derived from historical data in a stable climate era) and discount rate assumptions, which preference short-term growth-oriented spending over climate mitigation and adaption measures with longer term pay back periods.
- HMT should peer review a sample of the climate economics papers in leading economic journals used to calibrate integrated assessment models (IAMs) – to establish the extent to which the findings of economists on the future damages of climate change are consistent with the findings of contemporary climate science.
