THE European Union will levy taxes for transport and factories, ditch sales of gasoline-fuelled cars, and slap carbon levies on trade partners - to some, it is called 'greeninflation', reports Reuters.
Aluminum, electricity, and fertiliser are among sectors targeted, with others such as aviation in the EU crosshairs.
Meanwhile ,the United Nations is saying global warming is spiralling out of the control, the alternative of frequent floods, droughts, and forest fires is worse. Some dispute the significance of these claims or their relevance to global warming.
The question facing fund managers is which companies will see a profit hit, which can pass costs on, and will thrive.
For Peter Rutter, head of equities at Royal London Asset Management, the solution lies in modelling how, for instance, carbon dynamics may impact cash flow, revenues and share prices.
'We are big believers in greenflation. There are scenarios that take assets out of use, like cars that can no longer be driven or ships that are not allowed into certain ports,' he said.
'The other element is the injection of additional costs. If companies can pass on the costs, it's inflationary. If not, it adds inflation to production and hurts margins,' said Mr Rutter.
Company earnings are reflecting higher input costs. But it is hard to say which are environment-related.
Home Depot saw a 0.35 per cent fall in gross profits in the first quarter from a tripling of lumber prices, against a 31 per cent increase in sales.
And packaged foods company Conagra warned raw material and packaging costs were hurting profit, a headwind that would not ease until late-2022.
In shipbuilding, for instance, orders have plunged, which officials attribute partly to uncertainty over which technology to adopt for alternative fuels.
New vessels take up to three years to deliver and typically operate for more than 20 years, by which time high-emission ships may be unviable. And if shipping is added to carbon markets, owners must buy permits or risk port bans.
Prices for carbon emission allowances have more than doubled this year, which Morgan Stanley estimated had raised euro zone retail electricity prices by either per cent by June and added 0.23 per cent to inflation. A rise to EUR100 (US$117.3) will boost retail power prices 12 per cent, it says.
And clean energy faces costs of its own, with electrical equipment, wind turbines and fuel cells exposed to higher metals and shipping prices.
Michael Herzum, head of strategy at Germany's Union Investment, said price jumps are inevitable as carbon will be priced at a high enough level to incentivise change.
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Aluminum, electricity, and fertiliser are among sectors targeted, with others such as aviation in the EU crosshairs.
Meanwhile ,the United Nations is saying global warming is spiralling out of the control, the alternative of frequent floods, droughts, and forest fires is worse. Some dispute the significance of these claims or their relevance to global warming.
The question facing fund managers is which companies will see a profit hit, which can pass costs on, and will thrive.
For Peter Rutter, head of equities at Royal London Asset Management, the solution lies in modelling how, for instance, carbon dynamics may impact cash flow, revenues and share prices.
'We are big believers in greenflation. There are scenarios that take assets out of use, like cars that can no longer be driven or ships that are not allowed into certain ports,' he said.
'The other element is the injection of additional costs. If companies can pass on the costs, it's inflationary. If not, it adds inflation to production and hurts margins,' said Mr Rutter.
Company earnings are reflecting higher input costs. But it is hard to say which are environment-related.
Home Depot saw a 0.35 per cent fall in gross profits in the first quarter from a tripling of lumber prices, against a 31 per cent increase in sales.
And packaged foods company Conagra warned raw material and packaging costs were hurting profit, a headwind that would not ease until late-2022.
In shipbuilding, for instance, orders have plunged, which officials attribute partly to uncertainty over which technology to adopt for alternative fuels.
New vessels take up to three years to deliver and typically operate for more than 20 years, by which time high-emission ships may be unviable. And if shipping is added to carbon markets, owners must buy permits or risk port bans.
Prices for carbon emission allowances have more than doubled this year, which Morgan Stanley estimated had raised euro zone retail electricity prices by either per cent by June and added 0.23 per cent to inflation. A rise to EUR100 (US$117.3) will boost retail power prices 12 per cent, it says.
And clean energy faces costs of its own, with electrical equipment, wind turbines and fuel cells exposed to higher metals and shipping prices.
Michael Herzum, head of strategy at Germany's Union Investment, said price jumps are inevitable as carbon will be priced at a high enough level to incentivise change.
SeaNews Turkey