The world has a carbon budget. Deciding how to spend it is complicated, contentious and consequential. There has been a lot of focus on the various net zero commitments of countries and companies over the last year or so, but less on how this should be achieved. This is starting to change. At the country level, structural issues and availability of resources will make decarbonisation efforts feel different, but to meet Paris goals (to limit global warming well below 2.0°C, preferably 1.5°C), all countries ought to decarbonise quickly. But things are more complicated at the sectoral level, where large differences exist between the costs and abilities of different sectors to decarbonise. For investors, spotting and quantifying these differences is hard, but very important. Our climate transition tool, which provides decarbonisation pathways for 24 S&P 500 sectors under different scenarios, allows users to do just that.
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