1. Introduction
A paradigm shift is due to take place in the energy sources that will underpin the world economy. Many
countries have pledged to reduce global greenhouse gases (GHG) emissions based on the
commitments made prior to the 21st Conference of the Parties (COP21) to the United Nations
Framework Convention on Climate Change (UNFCCC). To this end, countries that are parties to the
Paris Agreement have been adopting measures to decarbonize their economies, by reducing the
intensity of GHG emissions, in particular in the energy sector.
The agreements reached at COP26 in November 2021 are expected to accelerate the requirement for
mitigation actions at different levels and regions across the globe. To be aligned with the Paris
Agreement, those actions are likely to be progressively more ambitious with the aim of achieving global
carbon neutrality by 2050. However, most likely and for the first time in the protracted and arduous
process of constructing an international climate regime, the emerging regulations may be surpassed as
a driver of transformational momentum by the radical changes occurring in the cost structure of
investments and the availability of low carbon intensity technologies. Further, companies’ long-term
perceptions of the convenience and necessity of adopting low carbon business models and green
investment development pathways will reinforce the pattern of change and provide incentives to
decarbonize.