PERI researcher Gregor Semieniuk and co-authors calculate that global stranded assets as present value of future lost profits in the upstream oil and gas sector exceed US$1 trillion under plausible changes in expectations about the effects of climate policy. Semieniuk et al. trace the equity risk ownership from 43,439 oil and gas production assets through a global equity network of 1.8 million companies to their ultimate owners. Most of the market risk falls on private investors, overwhelmingly in OECD countries. Rich country stakeholders therefore have a major stake in how the transition in oil and gas production is managed.

Pharmaceutical firms are highly profitable due to high price markups over costs of production. The case made in support of high markups is that they incentivize innovation and help fund research and development (R&D). Enes Isik and Özgür Orhangazi investigate the link between past profitability and drug discovery for large publicly-listed pharmaceutical firms between 1980 and 2018. They show that that pharmaceutical firms’ markups and profitability are consistently higher-than-average nonfinancial firm profitability, with secularly increasing trends since 1980. They also find no strong positive relationship between profitability for pharmaceuticals and new drug discovery.

The global economy is in a deep crisis at three levels -- the COVID-19 pandemic, economic slowdown, and climate change. PERI researcher Shouvik Chakraborty and Rohit Azad show that the crisis has created an opportunity to change the course of development, a model where people, and not profits, form the core. They outline an Indian Green Deal that will create new jobs and fundamentally alter the economy’s carbon footprint. This program is funded in an egalitarian manner, which puts the burden of adjustment on those whose lifestyles are primarily responsible for India’s environmental and economic crises.