Climate commitments have innate risks due to the uncertainties associated with the credibility and durability of those commitments. National commitments need to be backed up with policy and legislative action to ensure they are credible. Equally, the breadth and depth of domestic political support determines the durability of those commitments in light of economic and political shocks which could weaken support in the future.
The trajectory of the policy environment is uncertain, creating a risk to investors, as policy commitments suffer from a lack of:
Credibility: A measure of policy maturity. How developed is domestic decarbonisation policy in relation to Net Zero? Are rhetorical commitments backed up with substantial policy?
Durability: A measure of the depth and breadth of political support. How vulnerable is the energy transition to political and economic shocks?
Baringa’s Credibility & Durability assessments evaluate national commitments in light of these risks and uncertainties to highlight the relative confidence intervals surrounding national transition pathways; seeking to answer the question, are we on the right course?
How credible and durable are the EU's commitments?
Europe has long been a global leader on climate change with some of the strongest domestic policy goals. Indeed recent shortages of Russian pipeline gas have concentrated minds over European energy security and the vulnerabilities of the carbon economy. Risks remain however, as divisions within the 27 member bloc risk creating non-compliance amongst the group's poorest members.
For our full analysis, download our EU report below
We have conducted Credibility and Durability assessments for the four major global emitters. Read our analyses for the US, China and India.