Interview
Mark Carney, UN Special Envoy for Climate Action and Finance
- Strong societal pressure and government intent are driving climate action, though political implementation requires market-designed solutions to ensure practical effectiveness.
- The UK government plans an ambitious policy program including fiscal support for home retrofits and renewable power, with a fiscal deficit projected to drop from approximately 20% of GDP this year to around 10% or the high single digits as emergency transfers recede.
- Hydrogen initiatives in Europe and Germany aim to reduce costs through a "carbonomics" shift, while the EU carbon price is expected to rise to €75–€100 by 2030 and a global average of $3 in covered regions is seen as critical.
- Regulatory deadlines for ending internal combustion engine production are currently set for 2035 but may be accelerated by a few years.
- Carbon border adjustment taxes are under development at the WTO with strong EU support and potential US administration interest, likely first targeting heavy-emitting sectors like steel, cement, and industrial facilities once a specific price threshold is met.
- Future globalization may fragment into non-global "clubs" with high-integration platforms focused on shared objectives in technology, data, cyber, and artificial intelligence rather than broad global integration.
- Fiscal rebalancing will require decisions on the speed of deficit reduction and a shift in spending from current expenditures to capital investment, while market certainty on carbon pricing paths is expected to accelerate adjustments via discounted cash flows.
- Central banks aim to maintain credibility and a consistent policy path to provide market predictability, although this mechanism does not always succeed.