Costs of carbon

SUPPORT FOR solar panels in Georgia came from a surprising point on the American political spectrum. In 2013 Georgia Power, the local electricity monopoly, was reluctant to increase the use of solar panels. That irked Debbie Dooley, a preacher’s daughter and co-founder of Atlanta’s Tea Party, a hard-right Republican faction. She wanted more energy independence, and rooftop solar was one answer. Forming an alliance with the Sierra Club, a green lobby group, she established the Green Tea Party coalition. It helped defeat a bid by Georgia Power to hit rooftop-solar customers with high fees. Since 2013 Georgia’s solar capacity has jumped more than 13-fold.

Politicians of all stripes are introducing green regulations. The Grantham Research Institute at the London School of Economics counts over 1,900 pieces of climate legislation around the world. Almost two-thirds were enacted in the past ten years. That may be good news for the planet, if perhaps not for many firms. By one estimate transition-related regulation, particularly carbon pricing, and technological disruption could reduce the market capitalisation of 1,400 of the world’s biggest companies by 3%, or $1.6trn. And the costs are not evenly spread. For some the figure will be as big as 60%. In anticipation of carbon pricing, a small minority of companies are decarbonising—but too...

Read More