The Inevitable Policy Response to climate change

The Inevitable Policy Response and climate transition scenarios

The Inevitable Policy Response (IPR) is a climate transition forecasting consortium commissioned by the PRI which aims to prepare institutional investors for the portfolio risks and opportunities associated with an acceleration of policy responses to climate change.

IPR forecasts a continued acceleration in climate policy, driven in part, by the twin Paris Agreement Global Stocktake/Ratchet cycles between now and 2030. IPR assesses that those policy responses will be increasingly forceful, abrupt, and disorderly and produces in-depth scenarios to assist investors in navigating the financial, market and real economy uncertainties inherent in climate transition.

The latest (2023) IPR Forecast Policy Scenario (FPS) and associated energy, land use and bioenergy reports can be found here.

What makes IPR distinct from other scenarios:

IPR scenarios are designed to provide a market view around which financial institutions can base their central expectations. IPR is driven by a detailed assessment of likely policy trajectories in the short and long term, grounded in transparent views on major policy areas across all major countries/regions.

  • This in contrast to ‘hypothetical’ scenarios based on a temperature constraint or on assuming stated commitments are met.
  • IPR is transparent about the policy expectations so that financial institutions can understand the specific views that drive the scenarios.
  • IPR takes into account critical technology and market forces that facilitate policy shifts and that are accelerated by policy shifts.
  • As a result of this, IPR also provides a more realistic short-term trajectory and a well-grounded view of the shape of the transition over time.

What does IPR produce ?

The most extensive set of publicly available scenarios and underlying investor value drivers. This enables financial institutions to assess the risks and opportunities across the major sectors impacted by climate transition.

It also enables financial institutions to assess with greater granularity decisions about climate risk management and net zero alignment.

Energy, systems and land use

Apart from energy systems much of the detailed scenario analysis is related to food and land-use systems. IPR looks at the land-use related transition more thoroughly than other scenarios, including the extent of possible dietary shifts, the development of bioenergy, and the emergence of nature-based solutions (NBS).

Investor Value

By providing both the Forecast Policy Scenario (FPS), our most likely scenario and the Required Policy Scenario (RPS) our 1.5-degree scenario, IPR enables financial institutions to consistently assess:

  • a forecast scenario for a risk and return central case (FPS)
  • a full 1.5-degree net zero pathway (RPS) that:
    • investors could choose to align to, and
    • can be used as a stress test

Sign up for an investor briefing:

This is a flagship project for the PRI, I urge all signatories to assess the implications of the Inevitable Policy Response for their portfolios and act now to protect and enhance value

- Fiona Reynolds, former CEO, PRI

Webinar: IPR / PRI 2024 Quarterly Briefing Series

Transition Since Dubai - Progress post the COP28 Stocktake

Tuesday April 9th 14:00 GMT

Webinar: IPR Quarterly Briefing

Direct Air Capture (DAC): Its future role and feasibility within Negative Emissions Technology

View the webinar recorded on 16 November 2023 on the Webinars On Demand page. Check the attachments tab for the latest IPR reports on DAC policy considerations, engineering challenges and investment opportunities.

Visit the new IPR Website for more information.

Webinar: IPR 2023 FPS – Investor deep dive

Watch this webinar, which took place 25 October 2023, via the Webinars On Demand page

Download the new IPR 2023 forecasts and climate policy scenarios for investors

New Site: IPR Content Including the 2023 FPS

IPR content has moved to a new website ! You can find our just launched 2023 policy forecasts and the associated detailed energy, land and bioenergy reports, scenario explorer and other recent 2023 content on the new site here. Existing content will still be onsite with the PRI while we effect the full changeover.

Quarterly Forecast Tracker

Building on the October 2021 IPR 1.8C Forecast Policy Scenario ( FPS ) and 1.5 degree Required Policy Scenario ( RPS ) policy suite, in 2022 IPR is issuing Quarterly Forecast Trackers (QFTs) assessing climate policy, technology and land use developments and acceleration or deceleration in policy ambition against these 2021 IPR scenarios.

IPR Policy Gap Analysis

At COP27, IPR launched the new IPR Policy Gap Analysis assessing total progress to date against the Inevitable Policy Response scenarios in the years preceding the 2025 ratchet. It builds upon the 2022 Quarterly Forecast Trackers and provides a sector by sector assessment of policy developments across the G20+ economies.

IPR and Policy Scenarios

  • IPR

    What is the Inevitable Policy Response?

    Financial markets today have not adequately priced-in the likely near-term policy response to climate change. The Inevitable Policy Response (IPR) is a pioneering project which aims to prepare investors for the associated portfolio risks.

  • IPR-POL-HERO

    The Inevitable Policy Response 2021: Policy Forecasts

    The IPR 2021 policy forecast is a thoroughly revised and updated set of policy forecasts, reflecting further detailed research on current and proposed policies, with input from global policy experts. The policy forecasts were updated in October 2021 to reflect developments between March 2021 to COP 26 and form the ...

  • warming_climate

    The Inevitable Policy Response 2021: Forecast Policy Scenario and 1.5C Required Policy Scenario

    New 2021 Forecast Policy Scenario from IPR shows rapid policy acceleration by 2025 would bring ‘below 2C’ Paris Agreement within reach

  • PRI_Hero_IPR_Forecast_Policy_Scenario_Nature

    IPR Forecast Policy Scenario + Nature

    IPR FPS + Nature 2023 is the first integrated nature & climate scenario for use by investors. It fills a crucial gap in risk / opportunity assessments. FPS +N provides financial institutions with a forward-looking view to 2050 on how policy, technological and social trends could impact key value drivers.

Supporting Key Documents

Supporting Key Documents

Latest Posts

  • tech_world_land

    New IPR report examines global Race to the top on clean energy

    2023-01-25T08:00:00+00:00

    Race to the top on clean energy – The US and EU response to China’s dominance: A new catalyst for more renewables involves a likely chain reaction of industrial policies for green industries in Western countries as evidenced in the EU Green Deal Industrial Plan.

  • PRI_Hero_IPR_Forecast_Policy_Scenario_Nature

    IPR Forecast Policy Scenario + Nature

    2023-01-09T08:30:00+00:00

    IPR FPS + Nature 2023 is the first integrated nature & climate scenario for use by investors. It fills a crucial gap in risk / opportunity assessments. FPS +N provides financial institutions with a forward-looking view to 2050 on how policy, technological and social trends could impact key value drivers.

  • How global supply chain networks shape CSR around the world

    IPR Supply Chain Analysis for tropical soft commodities

    2022-10-26T08:21:00+01:00

    The new IPR supply chain analysis enables better climate risk analysis of tropical commodity supply chains by estimating value drivers and linking those to company exposure.

  • US paper image

    The US discovers its climate policy: A holistic assessment & implications

    2022-10-04T06:10:00+01:00

    IPR has previously forecast that the US NDC would be achieved by 2030 and additionally, that the US will reach net zero by 2050.

  • Brazil Policy Analysis

    Can Lula save the Amazon? A Brazil Policy Analysis

    2022-06-30T06:18:00+01:00

    The Amazon is a hotspot of global deforestation. Critically, illegal activities have been a key driver. Addressing this must be a primary focus in any attempt to end deforestation. The outcome of the October elections in Brazil at both the presidential and congressional levels are a pivotal moment. This analysis ...

  • Global Carbon PricingV2

    Global Carbon Pricing: Assessing the potential of the EU CBAM and Climate Clubs

    2022-05-31T06:34:00+01:00

    This short paper by Brian Hensley and Marie Louise Gammelgård-Larsen at Kaya Advisory, a specialist climate policy consultancy, has been commissioned by the Inevitable Policy Response (IPR). It assesses the state of global carbon pricing, evolving policies around the EU Carbon Border Adjustment Mechanism (CBAM) and concepts such as Climate ...

  • Globe_41738_CP

    The Just Transition: Shaping the delivery of the Inevitable Policy Response

    2022-04-11T07:15:00+01:00

    Professor Nick Robins analyses the growing influence of just transition on climate policy across civil society, business and finance and outlines its emergence as key factor shaping how Inevitable Policy Response (IPR) global forecasts play out on carbon pricing, clean energy, fossil fuel phase down, EVs, agriculture and land use.

  • iStock-500160175

    Ukraine War: The new geo-politics of energy and implications for climate policy

    2022-03-31T07:12:00+01:00

    This short paper by Kaya, a specialist climate policy consultancy, has been commissioned by the Inevitable Policy Response (IPR). It assesses the initial implications for climate policy as a result of Russia’s invasion and war in Ukraine.

  • IPR_TDM

    IPR and PACTA - The new Transition Disruption Metric

    2021-12-08T08:00:00+00:00

    The Transition Disruption Metric (TDM) is based in the IPR 2021 Forecast Policy Scenario (FPS) scenario developed by IPR

  • IPR land use_hero

    An investor guide to negative emission technologies and the importance of land use

    2020-10-26T08:30:00+00:00

    As momentum towards net zero rises around the world, this report provides much needed transparency on the importance of land use and the role of Negative Emissions Technologies (NETs) in the transition to net zero.

  • pathway_to_net_zero

    Pathways to net zero: scenario architecture for strategic resilience testing and planning

    2020-07-02T07:38:00+01:00

    Climate change poses a systemic risk to institutional investors. All portfolios are exposed to it, yet the impacts will be uneven across asset classes, sectors and geographies.

  • IPR_water_hero

    The inevitable water finance response: investor risks and opportunities

    2020-06-11T09:00:00+01:00

    Investors are not managing existing water risk, let alone taking advantage of upside opportunities through better water-related investment. Forward-looking investors will develop investment channels for sustainable and productive water management and fundamentally re-align how they understand water risks.

Archive

food_land_IPR

Food & Land Systems – The Secret Weapon in the War on Climate Change

2022-03-15T16:15:00+00:00

Clean Energy is not enough to get the world to 1.5C. Mass Reforestation and Linking Agriculture with Carbon Pricing are critical to emissions reduction.

IPR 2

A Below 2C Outcome? Possible - But 1.5 Deg? Not yet

2021-12-15T11:14:00+00:00

Pete Betts, Former Lead Negotiator on Climate for the EU and UK, and Senior Advisor to IPR reflects on the post Glasgow outlook

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To better understand how the Inevitable Policy Response could be of use to your and your investment team, please get in touch.
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