Final published version
Licence: CC BY: Creative Commons Attribution 4.0 International License
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Stranded human and produced capital in a net-zero transition
AU - Chester, Daniel
AU - Lynch, Cormac
AU - Mercure, Jean-Francois
AU - Jarvis, Andrew
PY - 2024/9/30
Y1 - 2024/9/30
N2 - The pace of the net-zero transition required to meet the Paris Agreement objectives puts the value of existing carbon-dependent capital at risk of premature depreciation. This risk extends beyond physical capital and threatens occupations and livelihoods. We quantify the current value and turnover timescales of existing global human and produced capital and compare the rate at which it naturally depreciates with that at which it would be required to depreciate to achieve climate targets. We find that achieving net-zero in 2050 by ending carbon-intensive investment in 2020 would have put up to 117 T$ of global capital value at risk. Delaying a ban on carbon-intensive investment to 2030, however, implies a risk of up to 557 T$ (37% of current capital), around three quarters of which is human capital. Reducing these risks could warrant intervention in both the financial and educational systems, where training for occupations that may soon cease to exist could be avoided. Other similar transformative policies to stimulate new economic capabilities in fossil fuel dependent regions are needed to ensure a just transition.
AB - The pace of the net-zero transition required to meet the Paris Agreement objectives puts the value of existing carbon-dependent capital at risk of premature depreciation. This risk extends beyond physical capital and threatens occupations and livelihoods. We quantify the current value and turnover timescales of existing global human and produced capital and compare the rate at which it naturally depreciates with that at which it would be required to depreciate to achieve climate targets. We find that achieving net-zero in 2050 by ending carbon-intensive investment in 2020 would have put up to 117 T$ of global capital value at risk. Delaying a ban on carbon-intensive investment to 2030, however, implies a risk of up to 557 T$ (37% of current capital), around three quarters of which is human capital. Reducing these risks could warrant intervention in both the financial and educational systems, where training for occupations that may soon cease to exist could be avoided. Other similar transformative policies to stimulate new economic capabilities in fossil fuel dependent regions are needed to ensure a just transition.
U2 - 10.1088/2752-5295/ad7313
DO - 10.1088/2752-5295/ad7313
M3 - Journal article
VL - 3
JO - Environmental Research: Climate
JF - Environmental Research: Climate
SN - 2752-5295
IS - 4
M1 - 045012
ER -