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Climate Change Special Initiative - Latest Thinking

Please review some of our latest thinking on climate change.
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McKinsey Quarterly Articles
Helping 'green' products grow
October 2008
When customers reach the cash register, they often forget their eco-friendly attitudes. Businesses can do a lot more to help would-be “green” consumers walk their talk.
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How IT can cut carbon emissions
October 2008
Information and communications technologies will become a major source of greenhouse gas emissions but can abate far more of them.
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How climate change could affect corporate valuations
October 2008
Efforts to reduce climate change can profoundly affect the valuations of many companies, but executives so far seem largely unaware.
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What countries can do about cutting carbon emissions
April 2008
Greenhouse gas emissions can be cut significantly—and, surprisingly, without huge disruption.
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Business strategies for climate change
April 2008
Huge value is at stake. The winners will be companies that reposition themselves to seize the opportunities of a low-carbon future.
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Cutting carbon, not economic growth: Germany's path
April 2008
The country can go on cutting its greenhouse gas emissions substantially, but difficult trade-offs loom.
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Addressing consumer concerns about climate change
March 2008
A McKinsey Quarterly survey finds that businesses must act on global warming and other issues to narrow a general trust gap between them and the public.
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Abatement and Regulation
The carbon productivity challenge: Curbing climate change and sustaining economic growth
June 2008
Meeting commonly discussed greenhouse gas abatement paths by 2025 while maintaining economic growth will require a tenfold increase in "carbon productivity," the amount of GDP produced per unit of carbon equivalents emitted. The macroeconomic costs of this "carbon revolution" are likely to be manageable.
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Greenhouse gas abatement opportunities in Sweden
April 2008
Sweden already has among the lowest emissions per capita in the western world. Over the long term, though, it still has significant options for further emission reduction.
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An Australian cost curve for greenhouse gas reduction
February 2008
The McKinsey & Company report An Australian cost curve for greenhouse gas reduction provides a fact-based analysis on emission -reduction potential and the associated cost for the Australian economy. Its findings are that significant greenhouse gas reduction is achievable and affordable but requires urgent action to implement the full potential.
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Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?
November 2007
Starting in early 2007, a research team from McKinsey worked with leading companies, industry experts, academics, and environmental NGOs to develop a detailed, consistent fact base estimating costs and potentials of different options to reduce or prevent GHG emissions within the U.S. through 2030. The team analyzed more than 250 options, encompassing efficiency gains, shifts to lower-carbon energy sources, and expanded carbon sinks.
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Climate Change: Everyone's Business
November 2007
McKinsey was commissioned by the Confederation of British Industry (CBI) to produce an analysis of the options for greenhouse gas reduction in the U.K. We have worked with industry experts, academics and leading businesses and this CBI Climate Change Task Force Report shows that the UK's carbon reduction targets for 2020 are likely to be missed but that 2050 goals, whilst stretching, can be achieved at a manageable cost – provided a greater sense of urgency is now adopted by government, business and consumers.
Read more on the CBI Web site
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Appendix: McKinsey analysis (PDF - 209 KB)
Costs and potentials of greenhouse gas abatement in Germany
October 2007
A report by McKinsey and Company on behalf of "BDI Initiativ - Business for Climate". Together with the German Industry Association (Bundesverband der Deutschen Industrie - BDI), McKinsey's German Office developed a view on costs and potentials of Greenhouse Gas Abatement in Germany until 2020/2030. More than 70 companies and associations were involved in assessing the different abatement levers. In sum, abatement of 30 percent (compared to 1990) seems feasible.
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Launch the Deep Dives - Industry (PDF - 3.54 MB)
Launch the Deep Dives - Energy (PDF - 2.5 MB)
Launch the Deep Dives - Transport (PDF - 2.33 MB)
Launch the Deep Dives - Buildings (PDF - 2.35 MB)
Curbing Global Energy Demand Growth: The Energy Productivity Opportunity
The McKinsey Global Institute, 2007
In-depth sector case studies covering buildings, transportation, and industries highlight how the right policies and investments in existing technologies that yield an internal rate of return of 10 percent or higher could contribute to a reduction in global energy demand growth by at least half to 2020.
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EU Emission Trading Scheme: Report on International Competitiveness
European Commission, 2006
The European Commission's DG Environment appointed the Firm to support it in developing a review of the trading scheme (EU ETS). Among other things, they were asked to develop an understanding of its impact on the competitive position of participants and to analyze possibilities for the design of the scheme after the second trading period.
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EU Emission Trading Scheme: Review
European Commission, 2005
The DG Environment commissioned a survey regarding the EU Emissions Trading Scheme (EU ETS) and how it impacts corporate behavior. Half the companies surveyed already 'price in' the value of allowances and over 70% intend to do so. 
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Preparing for a Low-Carbon Future
The McKinsey Quarterly, 2004 Number 4
Executives should respond to investors by determining how carbon regulation will change costs and then communicating a clear response. They should also reduce emissions where possible and help shape the regulations affecting their industries.
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Low Carbon Growth Markets
Carbon capture and storage: Assessing the economics
September 2008
Carbon capture and storage has potential to play a significant role in the European and global response to climate change. However, there are uncertainties to overcome, and this will impact on its cost.
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Betting on Biofuels
The McKinsey Quarterly, 2007 Number 2
The industry is still in its infancy but evolving rapidly. Companies that hope to compete must devise their entry strategy now.
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Global Trends in Energy
The McKinsey Quarterly, 2007 Number 1
Global providers of energy face a decade of unprecedented change. The competitive landscape is being reshaped by six trends – notably, booming demand for energy, a shift in the sources of oil and basic materials to remote locations, and heightened scrutiny of the environmental effects of the production and consumption of energy and materials
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Positioning Brazil for Biofuels Success
The McKinsey Quarterly, Special Edition: Shaping a new agenda for Latin America, 2007
Brazil's ethanol industry is well positioned for growth, but surging demand will challenge the industry
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Making the Most of the World's Energy Resources
The McKinsey Quarterly, 2007 Number 1
Demand for energy is set to grow rapidly during the next 15 years—unless governments, businesses, and consumers take advantage of the many substantial, economically viable, and technologically proven opportunities to boost energy productivity
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Productivity of Growing Global Energy Demand: A Microeconomic Perspective
The McKinsey Global Institute, 2006
To date, the global debate about energy has focused too narrowly on curbing demand. Instead, the best is to focus on energy productivity, which reconciles both demand abatement and energy efficiency.
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Sector Strategies and Functional Service Lines
Smarter Investing in Energy Commodities
The McKinsey Quarterly, 2006 Web exclusive
Banks, hedge funds, and private equity firms are among the new breed of participants in markets for trading energy commodities. To continue to profit from these activities, such financial players must reexamine their original entry strategies.
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Meeting China's Energy Needs Through Liberalization
The McKinsey Quarterly, Special Edition: Serving the new Chinese consumer, 2006
China's thirst for imported oil has the government concerned about securing enough energy to keep economic growth on track. Its state-controlled oil companies are paying premium prices for new reserves. A better alternative would be to liberalize China's energy sector
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Sustainability & Corporate Social Responsibility
How companies think about climate change: A McKinsey Global Survey
February 2008
A McKinsey Quarterly survey finds that most executives think climate change matters for their companies. Although few have taken action, they are optimistic about the possibilities.
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Investing in Sustainability: An Interview with Al Gore and David Blood
The McKinsey Quarterly, 2007 Web exclusive
The former US Vice President and his partner in an investment-management firm argue that sustainability investing is essential to creating long-term shareholder value
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Exploring Business's Social Contract: An Interview with Daniel Yankelovich
The McKinsey Quarterly, 2007 Number 2
Business executives overwhelmingly agree that they must serve the public good as well as deliver profits to shareholders. Daniel Yankelovich, a founding father of public-opinion research and its preeminent practitioner, discusses the current state of the contract between business and society.
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Shaping the New Rules of Competition
UN Global Compact, 2007
Survey on CEOs of companies participating in the UN Global Compact, which was followed by in-depth interviews. In this paper, the authors explain why businesses must confront environmental, social, and governance (ESG) challenges. New models of collaboration and competition are presented, some of which are helping companies to succeed today
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A New Era for Business
Stanford Social Innovation Review, 2007
More and more business leaders recognize that their company’s future is increasingly intertwined with the needs and demands of society. What many executives don’t understand is how best to incorporate sociopolitical issues into the strategic decision making process
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