Key Facts and Policy Implications

This fact sheet from the Climate Policy Initiative outlines the financial risks and opportunities for China, the European Union, India, and the United States in transitioning to a low-carbon economy based on an IEA two-degree scenario.

• China faces significant asset stranding risks in its power sector, as 78% of its planned or under-construction coal-fired power plants (378 GW) exceed the IEA two-degree scenario threshold. However, China could provide nearly half of the global carbon savings from coal in this scenario. Additionally, the public sector owns 75-90% of China's fossil fuel assets.
• The European Union has low risk of asset value loss from coal power, with total value at risk under $3 billion (less than 2% of 2011 power plant investments), provided there is no new investment in existing or new coal plants. The EU also faces little stranding risk for natural gas production as a net importer. Furthermore, updating financial models and instruments could lower the cost of renewable energy in Europe by up to 20%.
• India's transition is challenged by the fact that 77% of its planned or under-construction coal-fired power plants (318 GW) are above the IEA two-degree scenario threshold, which could drain the financial system and hinder development goals. National and state governments own 45-75% of fossil fuel assets. The cost of low-carbon power in India could be reduced by 30% through the use of long-term, low-cost debt.
• In the United States, the transition to a low-carbon economy could provide a net benefit of over $300 billion to the financial system. While the U.S. is largely on track to meet 450ppm levels without significant asset loss from coal, approximately $300 billion in natural gas asset value is at risk after 2030. Most fossil fuel assets are privately owned, with governments owning about 20% of coal-fired power plants. Similar to the EU, new financial models could reduce renewable energy costs by up to 20%.
• Globally, natural gas consumption must peak around 2030 to minimize value loss in an IEA two-degree transition scenario. For net oil-consuming countries, which represent three-fourths of global demand, a combination of pricing and innovation policies to reduce oil demand can lead to significant financial benefits.

APA

Climate Policy Initiative (n.d.). Key Facts and Policy Implications. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/10/NCE-regional-fact-sheets-EMBARGOED-FOR-RELEASE-OCTOBER-9-2014-0001-am-EST-or-0501-am-BST-2.pdf

Chicago

Climate Policy Initiative. Key Facts and Policy Implications. n.d. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/10/NCE-regional-fact-sheets-EMBARGOED-FOR-RELEASE-OCTOBER-9-2014-0001-am-EST-or-0501-am-BST-2.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Key Facts and Policy Implications |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2014/10/NCE-regional-fact-sheets-EMBARGOED-FOR-RELEASE-OCTOBER-9-2014-0001-am-EST-or-0501-am-BST-2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiativendkey, author = {{Climate Policy Initiative}}, title = {{Key Facts and Policy Implications}}, institution = {Climate Policy Initiative}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2014/10/NCE-regional-fact-sheets-EMBARGOED-FOR-RELEASE-OCTOBER-9-2014-0001-am-EST-or-0501-am-BST-2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }