Achieving the 1.5 ° C target requires a radical transformation of the inherently inert energy system. Assets in the form of fossil energy resources and existing infrastructure along the fossil value chain run the risk of rapidly losing value and becoming „Stranded Assets”. The owners of these assets therefore have incentives to delay or even prevent the implementation of climate policy. The objective of FoReSee is to investigate how long-lived capital and the incentives resulting from the risk of Asset Stranding hinder the effectiveness of climate policy. The project develops policy measures that reduce the inertia of the energy system and quantifies distributional effects of different climate policies on vulnerable sectors and countries.
Furthermore, the reactions of private actors to current and expected policies are examined in order to better understand how these influence efficient climate policies. The focus of FoReSee is thus on the interaction of actors, policies and information on financial and resource markets, taking into account political economy and institutional constraints to effective climate change mitigation. FoReSee investigates recently discussed supply- and demand-side climate policies and strives to suggest alternative instruments.
The project combines empirical, numerical and applied theoretical methods to advise climate policy in the correction of inefficient market reactions. In order to ensure relevance and political feasibility, experts from politics, science and industry (i. a. companies from the energy and financial sectors as well as representatives of fossil-fuel producing countries) will be involved in the project. The results will be made available continuously over the project horizon in policy briefings, discussion papers, peer-reviewed academic journal articles, at international conferences and in integrative project workshops.
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