A new study by Cambridge University finds that “investors are becoming more aware of the short-term impact that the warming planet may have upon financial markets,” posing risks to financial stability and negatively impacting investments. Recently at RFF, Nobel Laureate Robert Engle suggested that these climate impacts be viewed as a long-term investment risk, noting: “If we are effective at responding to climate change, the stock market should reward us today for taking … steps to reduce long-term risk in the future.” He recommended developing a hedging strategy by “looking for companies that are expected to do well in a high-cost but low-use carbon environment. This could include alternative energy strategies, non-carbon transportation and manufacturing solutions, sequestration technologies, and so forth.” Read his article in Resources or watch the video from his RFF Policy Leadership Forum.
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