Climate transition: more fragmented and delayed
Hot house world
Too little too late
Disorderly
Orderly
Low demand
Fragmented World
Net Zero
2050
(1.5%)
Below
2°C
Delayed transition
NDCs
Current policies
Transition risk
HIGH
LOW
Climate policy
Consumer preferences
Technology
Phsyical risk
HIGH
LOW
Extreme weather events
Gradual changes in climate
*NGFS (Network for Greening the Financial System) Scenario framework. All information is retrievable on the NGFS website https://www.ngfs.net/ngfs-scenarios-portal/explore
A mix of the Fragmented World (with a higher probability compared to last year) and Delayed Transition with limited net zero efforts up to the mid-2030s, followed by a faster acceleration to mitigate physical costs as damages become evident.
We expect policy and emissions reactions to be gradual, with a modest rise in shadow carbon prices initially.
AMUNDI INVESTMENT INSTITUTE
CENTRAL SCENARIO 2025
2023
2023
2024
2024
2025
2025
Low demand
Fragmented World
Net Zero
2050
(1.5%)
Below
2°C
Delayed transition
NDCs
Current policies
Last year, our central scenario combined orderly (Net Zero 2050 and Below 2°C) and disorderly (Delayed transition) pathways to account for a world characterised by geopolitical fragmentation and lower commitments for some countries.
AMUNDI INVESTMENT INSTITUTE
CENTRAL SCENARIO 2024
Divergent Net Zero
(0.5°C)
Net Zero
2050
(1.5%)
Below
2°C
Delayed transition
NDCs
Current policies
In 2023, to model increasing geopolitical fragmentation stemming from the Ukraine war, our central scenario relied on the disorderly ‘Divergent Net Zero’ path characterised by higher short-term costs due to divergent policies resulting in abrupt adjustments to phase out the use of oil.
AMUNDI INVESTMENT INSTITUTE
CENTRAL SCENARIO 2023
A new more adverse scenario of a "Fragmented world" has been added in 2024 but we don't think it will materialise.
The Fragmented World scenario assumes delayed and divergent climate policy ambition globally, leading to elevated transition risks in some countries and high physical risks everywhere due to the overall ineffectiveness of the transition.*
FRAGMENTED WORLD
According to NGFS
Policy ambition
2.3°C
Policy reaction
Delayed and fragmented
Technology change
First slow, then fragmented
Regional policy variation
High variation
Click on the highlighted bubbles to discover more about NGFS scenarios
Delayed Transition assumes global emissions do not decrease until 2030. Strong policies are then needed to limit global warming to below 2°C. The level of action differs across countries and regions based on currently implemented policies.
Ongoing delays have reduced the prospects of an orderly transition, increased transition risks in order to reach a 1.5-2°C target, and resulted in overall higher physical risks in our central scenario. This sees the continuation of current geopolitical fragmentation and the willingness of some countries to smoothen their commitment to Net Zero over a longer time horizon.
DELAYED TRANSITION
According to NGFS
Policy ambition
1.7°C
Policy reaction
Delayed
Technology change
Slow/fast change
Regional policy variation
High
variation
Low demand
Net Zero
2050
(1.5%)
Below
2°C
NDCs
Current policies
Delayed transition
Fragmented World
A mix of the Fragmented World (with a higher probability compared to last year) and Delayed Transition with limited net zero efforts up to the mid-2030s, followed by a faster acceleration to mitigate physical costs as damages become evident.
We expect policy and emissions reactions to be gradual, with a modest rise in shadow carbon prices initially.
AMUNDI INVESTMENT INSTITUTE
CENTRAL SCENARIO 2025
Net Zero 2050 limits global warming to 1.5°C through stringent climate policies and innovation, reaching global net zero CO2 emissions around 2050. This scenario assumes that ambitious climate policies are introduced immediately. Physical risks are relatively low but transition risks are high.
The orderly scenarios aligned to 1.5°C and 2°C global temperature rises
are now assuming increased disorderliness.
NET ZERO 2050 1.5°C
According to NGFS
Policy ambition
1.4°C
Policy reaction
Immediate and smooth
Technology change
Fast
change
Regional policy variation
Medium variation
Below 2°C gradually increases the stringency of climate policies, giving a 67% chance of limiting global warming to below 2°C.
This scenario assumes that climate policites are introduced immediately and become gradually more stringent though not as high as in Net Zero 2050.
Net-zero CO2 emissision are achieved by 2070. Phyisical and transition risks are both relatively low.
BELOW 2°C
According to NGFS
Policy ambition
1.8°C
Policy reaction
Immediate and smooth
Technology change
Moderate
change
Regional policy variation
Low
variation
In 2023 our central scenario relied on the disorderly ‘Divergent Net Zero’ path characterised by higher short-term costs due to divergent policies resulting in abrupt adjustments to phase out the use of oil.
In 2024, this path has to some extent been subsumed by orderly scenarios reflecting 1.5-2°C global temperature rises, which have consequently become more disorderly
DIVERGENT NET ZERO (0.5°C)
According to NGFS
The Divergent Net Zero (1.5 °C) scenario, previously included in Phase III, has been phased out in the new fourth vintage given the reduced likelihood of a successful uncoordinated transition .
AMUNDI CENTRAL SCENARIO 2025
AMUNDI CENTRAL SCENARIO 2025
AMUNDI CENTRAL SCENARIO 2023
AMUNDI CENTRAL SCENARIO 2024