ANNOUNCEMENTS
Climate change and global warming is one of the major issues of the 21st century. To address the issue of climate change, Paris Agreement was adopted in 2015. The agreement aims to limit global warming by shifting to sustainable development and low-carbon economies. However, an important aspect linked to climate change – “asset & resource stranding” due to shift to low-carbon economy needs to be studied to ensure economic sustainability & stability. This study develops a quantitative index to rank countries in terms of social resilience to the risk of stranding due to climate change. Following the framework of societal impact of climate related asset stranding developed by Hoffart & Holz (2024), the index uses three dimensions: governance risk (institutional quality), sectoral risk (dependency on fossil sectors), and socio-economic risk (macroeconomic vulnerability). The data of over 20 years (2000 - 2023), in is compiled for the BRICS, Nigeria, and major OPEC members (e.g. Saudi Arabia, Iran, UAE), each indicator is standardized, and PCA-Factor analysis is applied to determine sub-criteria weightages. The index uses weighted sum method to calculate the final score for each nation. The study concludes that high score of governance, quality of institutions and sectoral diversification lowers the societal impact of stranding. The analysis re-iterates the importance of institutional quality in an economy.
Keywords: asset stranding, resource stranding, energy transition, energy economics, sustainable development.
