Tim Buckley founded Climate Energy Finance Australasia in 2022, having co-founded and worked with the global energy finance think-tank IEEFA over 2013-2021. For 17 years Tim was a Managing Director at Citigroup, Head of Australasian Equity Research. Tim has published over 100 reports on the global energy transition.
Tim has 35 years financial markets experience, including providing public interest related financial analysis on the energy transition since 2013, studying China, India and Australia.
Praveen Gupta (PG): The top 4 Asian economies (China, Japan, India and S. Korea) are the ones most dependent on the Hormuz supply chain. Why and how does the blockade effect spill over worldwide?
Tim Buckley (TB): I view Trump’s motives as entirely self-serving, paying back his US fossil fuel funders by taking out a major region of competing fossil fuel supply, thereby pushing up the profits for the remaining players, of which the US is the #1 fossil fuel producer in the world. Trump initially bragged US fossil fuel firms would profit very nicely by his war on Iran, ignoring the massive cost to the average American from higher inflation and higher interest rates.
The US war against Iran has caused a spike in global inflation, and added cost pressures to the greater Asian region, given most countries here are very heavily dependent on imported fossil fuels. One strategic mis-calculation by the US was to assume that China would be hit hard by higher imported fossil fuel costs, but of course China was exceptionally well prepared with huge oil stockpiles and having pursued electrification and decarbonisation as a national priority to improve energy independence.
“I expect one lasting outcome of the US war on Iran is that Greater Asia will pursue far faster electrification and decarbonisation investments to build energy security”
PG: Wind and solar have the lowest cost per Kwh of any power generation method, the fastest response time, the shortest deployment time, zero pollution, complete recycling of components which can also be sourced domestically, and a fuel supply that will not run out. Are we at an inflection point?
TB: Yes, I expect one lasting outcome of the US war on Iran is that Greater Asia will pursue far faster electrification and decarbonisation investments to build energy security. This is going to be underpinned by the amazing technological improvements being seen, particularly in Chinese batteries, EVs and wind turbine scale. The ongoing deflation of cleantech even as the technology capabilities are improving will accelerate deployments.
I see batteries (BESS and behind the meter) as the largest disrupting factor in the global energy system in 2026. But EV adoption is accelerating everywhere except in the US, and that builds energy independence from the Middle East, but also will see vehicle-to-grid bidirectional charging technologies accelerate by the end of this decade, building grid resilience even as it allows even greater speed of integration of VRE into the electricity system. China is way ahead of the west, and with India’s massive reliance on imported fossil fuels, and chronic air pollution, I see rapid uptake there continuing as well.
PG: Understand that the Science Based Targets initiative (SBTi) dropped proposed rules that would have made it harder for a data centre group, running mostly on fossil fuels, to claim its energy needs were entirely met by renewable power to hit its climate goals?
TB: The US undermining of global action on dealing with the climate crisis means previous western led efforts for global solutions are being undermined, no doubt. But that plays totally into the hands of the long term nearly inevitable move from a uni-polar world to a multi polar world where there is more room for China and increasingly India to play a central global re-write of the world rules. While Trump remains, we are likely to see the development of regional and then inter-regional blocs of alignment on things like carbon pollutions rules, and carbon emissions pricing. My hope is the EU CBAM will serve as a model for a path to an Asian CBAM, but China will want to get its domestic settings totally in place first, and we are seeing that happen real time in 2026 with a 50% expansion of the China ETS into 6 key heavy industry sectors by the end of 2027.
PG: Why are voters in America increasingly turning against data centres in their backyards?
TB: Data centres are backed by massive pools of financial capital, and speed and scale of deployment is the current US land grab, and those developers don’t care about the need for a social licence to operate, nor the cost of enabling services like electricity and water to get established. The result is double digit annual rises in electricity prices as electricity demand rises faster than new supply. This is made even more pronounced given Trump has undermined investor confidence in new renewable energy infrastructure investments. The US is under investing in the low cost renewable energy infrastructure in order to keep aligned with the Whitehouse, but this is clearly undermining US decarbonisation and causing rapid energy cost inflation.
“The rise of carbon pricing in international trade will only make worse the declining profile of US exports over time”
PG: Why is the US feeling a pinch despite being a surplus producer and a global leader? Will fracking keep the US ahead of the pack despite the Climate crisis?
TB: I think we are watching real time the equivalent of the decline of the Roman empire, with the breakdown of key public institutions and self-interest being the order of the day in the US. The rise of carbon pricing in international trade will only make worse the declining profile of US exports over time, and the US is leaving the field when it comes to developing the cleantech zero emissions industries of the future. The US economy will survive, but Trump is playing entirely into the hands of China in terms of their lack of strategic thinking for long term competitiveness.
PG: Do you see some vigour in realignment of supply chains in wake of Hormuz?
TB: Yes. I think this has entirely vindicated China’s massive ongoing investment in OFDI globally, both in cleantech and upstream mining supply chains since the start of this decade. China now not only dominates battery and EV manufacturing globally, but also the upstream battery cathode and anode markets, and increasingly the critical minerals and strategic metal mining supply chains globally so it is increasingly able to withstand and ignore the bleatings of the US whitehouse.
CEF follows the money, and China is using geopolitics and OFDI in a strategic win-win manner in many countries globally that are increasingly unable to rely on the US to counter balance China’s internationalisation strategy. When China is offering to build industrial value-add precincts in return for access to other countries mineral resources, this is reshaping global alliances permanently across Asia, the Middle East, Africa and South America. Even the EU has been subject to constant undermining by the US, such that if China continues to play the long game, means I would not be surprised to see climate solutions a key aspect of building stronger EU-China collaborations as the US stands idly by.
“China’s relative standing is building. I expect to continue to see the Yuan rise as a functional currency in global trade”
PG: How critical is the Malacca Strait in the current state of geo-politics?
TB: It is geopolitically important, but China is winning the long game of geopolitics without resorting to force. Simply by letting the US undermine its own world standing, China’s relative standing is building. I expect to continue to see the Yuan rise as a functional currency in global trade, particularly given China’s growing global relevance and the increasing unreliability and unpredictability of the US as the global functional currency reserve.
PG: To what extent has the oil shortage spurred use of coal worldwide?
TB: At the margin, coal has benefited from Trump’s war against Iran. But as we have discussed, the long term strategic imperative for most countries is to align with the climate science and their treaty obligations under the Paris Agreement. Besides, the simple economic reality is that wind and solar firmed by batteries and transport / freight powered by EV is underpinned by economics, as well as energy security, I don’t see the Iran war as stimulating a long term rebound in coal. Coal’s global share of the energy mix peaked a decade ago at 42%, and is now down to ~30% globally in 2026. Coal’s share will continue to be progressively diluted.
China continues to build new coal power plants, but every year the average coal plant utilisation has declined for a decade – coal serves in China as a backup to their massive ongoing deployment of 300GW pa of renewable capacity deployments, but this back up role in China is going to be rapidly undermined as BESS deployments continue to grow 30-40% annually, with China alone representing half the world’s BESS deployments in 2025.
“If policy makers can be effective in resisting the AI vested interests… that will underpin a lot more electricity supply – driving electrification and decarbonisation in the process”
PG: Is the nuclear option ready to fulfill the AI industry’s growing demand?
TB: No. Nuclear might see an uplift in investment in the US in support of AI, given government subsidies and their need for a massive lift in electricity supply even as they undermine wind deployments, but nuclear is simply too expensive, and too slow, and faces too much social licence to operate to see a global renaissance any time soon. Solar is cheap and plentiful each and every day for 8 hours, this guts the economic merit of nuclear plants than need to run 24/7 to justify their massive capital cost.
PG: “Energy for AI, and AI for energy: Why the flywheel doesn’t spin yet” (Wei Wang)?
TB: The massive investment in datacentres to power AI can be marshalled to enable the investment in huge amounts of firmed renewable energy as an enabler. Capital is plentiful, if policy makers can be effective in resisting the AI vested interests, they can ensure data centres sign long term firmed renewable PPAs that will underpin a lot more electricity supply – driving electrification and decarbonisation in the process. That is the trend here in Australia, but vested interests will resist being made to bear costs they’d rather inflict on the public instead.
PG: Grateful for these insights into your crystal ball, Tim! You have always been well ahead of time.
Paul Sweeting is currently President of the Institute and Faculty of Actuaries (IFoA). He also serves on the boards of a number of insurance companies.
Prior to the current role, Paul was a Senior Advisor at Hassana Investment Company. He returned to Hassana having been the Governor Assistant for Financial Sustainability and Risk Management at the General Organization for Social Insurance (GOSI) in Saudi Arabia. Before joining GOSI, Paul was Hassana’s Chief Risk Officer. Hassana is responsible for managing the assets of GOSI.
Immediately prior to this he was a Professor of Actuarial Science at the University of Kent, where he taught enterprise risk management. Paul remains an Honorary Professor at Kent. His text book – “Financial Enterprise Risk Management” – is used by actuarial associations around the world for the Chartered Enterprise Risk Actuary qualification.
Praveen Gupta (PG): ‘Planetary Solvency – finding our balance with nature’ is a pathbreaking work by IFoA and University of Exeter. Planetary solvency marks the convergence of financial risk management and Earth systems. Don’t you think it is compelling enough to be incorporated by the IFRS, soonest?
Paul Sweeting (PS): The report is excellent at highlighting the risks that we are facing at a planetary level, and presenting the various risks in a consistent manner. It should certainly influence financial reporting – to help drive the various metrics in the right direction – but that requires firm-level reporting rather than the planetary metrics used here.
PG: Climate triggers do not constitute black swan events. They are gray rhinos. I am inclined to use these powerful metaphors when much of financial regulators tend to be abdicating their responsibility on the climate front. Your thoughts?
PS: I agree, metaphors can be very helpful, though climate change often feels like the elephant in the room rather than a rhino!
PG: Double materiality too needs to be embedded in risk management?
PS: Absolutely. For issues such as climate change, it is certainly the most appropriate framework – not just what your effect is, but how you are affected. I looked at this in detail in the forthcoming 3rd edition of my textbook, Financial Enterprise Risk Management.
“The rate at which the climate is changing compared to historical periods… making forward-looking modelling harder and less certain”
PG: Likewise, natural capital remains a blind spot?
PS: It does, for many areas. The challenge is to identify or quantify the impact of aspects that many might just view as “nice to haves”. A lot of the IFoA research tries to address this.
PG: Solar Radiation Management (SRM) is controversial – but calls for courage & foresight to address potential crises that our world faces. Sandy Trust and team at IFoA also with University of Exeter have put together – Parasol Lost: Recovery plan needed. A brilliant analysis which attempts to addresses SRM.
Even though the timelines are not clear. For instance, Atlantic Meridional Overturning Current (AMOC) may just slow or stall anytime from now to 2050. However, climate models are falling short. Parasol Lost ought to be an overdue wake-up call?
PS: SRM is controversial, as some approaches seem to take us in the opposite direction from various pollution reduction initiatives. But all solutions should be considered. In turns of climate modelling, there are a number of challenges. The first is the rate at which the climate is changing compared to historical periods. This means that interactions and feedback loops may act very differently from how that have behaved in the past, making forward-looking modelling harder and less certain. However, complex models are an area where actuaries should be especially comfortable.
PG: That puts actuarial at the front and centre – what next? Lead / drive transition finance.
PS: Indeed.
PG: Do you see actuaries actively contributing to policy making in times to come?
PS: We already are – IFoA research has a broad and influential audience. This is as it should be.
PG: Many thanks Paul for your excellent insights. I am sure the IFoA will continue to play an active path-breaking role in facilitating climate mitigation, adaptation and resilience.
Hetal Patel is a UK based Chartered Actuary. He is Head of Sustainable Investment Research at Standard Life.
Praveen Gupta (PG): While investors increasingly recognise climate change as a financial risk, there are significant gaps in action and consistency, shows a recent report. Despite 75 per cent of investors incorporating climate risks into their strategies, many lack credible transition plans?
Hetal Patel (HP): Investors widely acknowledge climate change as a material financial risk, and many now reference it explicitly within their risk-management policies. In several jurisdictions, this is even a regulatory requirement, which has helped drive broad adoption of climate-risk frameworks.
However, far fewer investors have developed credible transition plans, and this is where the gap becomes clear. Transition plans remain voluntary and require a much deeper level of commitment than standard risk-management disclosures. They involve setting clear interim targets, providing transparent strategies for achieving them, and ensuring board-level accountability.
“Many investors recognise the risk but stop short of implementing the comprehensive measures needed for a credible transition
From my perspective, several factors contribute to this shortfall. Investors face uncertainty about transition pathways, including evolving policy and technology landscapes. There is also concern about short-term underperformance relative to traditional benchmarks, which can discourage more ambitious climate-aligned actions. As a result, many investors recognise the risk but stop short of implementing the comprehensive measures needed for a credible transition.
PG: According to Prof. Narmin Nahidi of Exeter – Pension funds, insurance portfolios and long-term savings are heavily invested in companies, infrastructure and energy systems exposed to climate risk?
HP: Long-term savings vehicles are structurally exposed to climate risk because their investment horizons overlap with the period in which climate impacts will intensify. If pension funds and insurers remain heavily invested in high-carbon infrastructure and energy systems, they face both physical risks – like asset damage and disruption – and transition risks, such as policy tightening, carbon pricing, and technological shifts.
In managing this, I’d emphasise robust scenario analysis, stress-testing, and forward-looking risk assessment using climate metrics such as implied temperature scores. The goal is to align portfolios with a credible net-zero pathway, so beneficiaries’ long-term returns are protected rather than eroded by unmanaged climate shocks.
PG: Torsten Bell the UK Pensions minister has reportedly said: “Trust in Pensions it too low”. What drives such a perception and is it being suitably addressed?
HP: Low trust in pensions is driven by several long-standing issues. Many savers find the system complex and opaque, making it difficult to understand how their money is managed or what they can expect in retirement. High-profile concerns around fees, underperformance, and whether schemes act in savers’ best interests also undermine confidence. In addition, when people see their pension funds maintaining significant exposure to sectors that conflict with their values – such as heavy investment in fossil fuels -they question whether their savings are aligned with their long-term interests.
“Low trust in pensions is driven by several long-standing issues
There are steps being taken to address this. Recent regulatory initiatives – such as the requirement for schemes to publish an annual investment governance report and enhanced climate-related disclosures – are improving transparency. These measures help create clearer communication, stronger accountability, and better insight into how trustees oversee investments and manage climate risks.
However, rebuilding trust requires more than compliance. Pension schemes, trustees, and providers need to demonstrate genuine conviction: showing how climate and other long-term risks are integrated into decision-making, how capital is being reallocated to support members’ future financial security, and how stewardship is being used to drive positive change. Only by making these actions visible and meaningful can the sector begin to restore public confidence.
PG: The way financial markets react to climate risks – are they responsive enough to extreme weather events becoming more frequent and environmental pressures intensifying? How well are they ensuring the economic security of savers?
HP: Markets are starting to price climate risk, but not fully or consistently. We see sharp reactions around major events or policy announcements, yet many climate risks are slow-burn, non-linear, and under-reflected in current valuations. That can create a danger that savers are exposed to sudden price shocks which can be a problem when pensions payments fall due.
Ensuring economic security for savers means not waiting for markets to catch up but to proactively adjust portfolios, diversifying away from vulnerable assets, and building resilience into long-term strategies. I would encourage the systematic integration of climate scenarios into risk models, more rigorous engagement with high-risk counterparties and clearer escalation when progress is insufficient.
PG: And how do you ensure that Climate change is very much on the radars of trustees’ fiduciary duties?
HP: The starting point is to frame climate change explicitly as a material financial issue, not an ethical add-on. Fiduciary duty requires trustees to act in members’ best long-term interests, and climate risk is now inseparable from long-term financial outcomes. When trustees understand that climate factors directly affect asset values, volatility, and future liabilities, it becomes clear that addressing them is part of core fiduciary responsibility.
“Fiduciary duty requires trustees to act in members’ best long-term interests, and climate risk is now inseparable from long-term financial outcomes
In the UK, trustees are supported by statutory guidance requiring them to identify, manage, and report on climate-related risks and opportunities. In practice, this means embedding climate considerations throughout governance and investment processes. Key steps include outlining the policy on climate risk into the Statement of Investment Principles, ensuring regular board training on climate and transition risks, incorporating climate metrics and scenario analysis into Task Force on Climate-related Financial Disclosures (TCFD) reporting, and making climate a standing agenda item at trustee meetings.
I also see strong stewardship policies as essential. Clear expectations on voting, engagement, and escalation – including when divestment is appropriate – help trustees demonstrate that they are actively managing climate risk rather than simply acknowledging it. Taken together, these measures ensure climate change is treated as a central component of fiduciary duty and not something peripheral.
PG: Are environment, societal and governance (ESG) factors well embedded at the governance level and diligently adhered to?
HP: ESG is often present in policy documents, but the real test is whether it shapes decisions. I’d look to capture ESG – especially climate – into board competencies, risk frameworks, and remuneration structures. For example, linking part of executive pay to climate outcomes.
When governance structures and incentives are aligned, adherence becomes much more consistent and credible.
PG: How seriously do you see fossil fuel as stranded assets in the near term?
HP: In the long term, there is a genuine risk that certain fossil-fuel assets become stranded, particularly high-cost or long-lived projects that rely on demand, policy, or price assumptions that may not hold. As climate policy tightens, low-carbon technologies scale, and investor expectations shift, some reserves and infrastructure may never be fully exploited or may lose value far more quickly than anticipated.
That said, this does not imply an immediate or wholesale exit from all fossil-fuel exposure. In periods of geopolitical tension – such as the current environment – oil and gas prices can spike, and fossil-fuel companies may outperform in the short run. The key is to be highly selective and forward-looking, rather than assuming past performance will continue.
“I would prioritise rigorous assessment of assets under stringent climate scenarios…
From a portfolio perspective, I would prioritise rigorous assessment of assets under stringent climate scenarios, reducing exposure to the segments most vulnerable to transition risk, and reallocating capital toward transition-aligned opportunities such as renewables, grid infrastructure, energy efficiency, and broader climate solutions. This helps ensure we are not left holding assets that cannot deliver an adequate risk-adjusted return as the global energy system evolves.
PG: Is the UK market witnessing law suits against pension funds for not addressing Climate Change adequately?
HP: Not yet in any significant volume. In the UK, we haven’t seen major lawsuits directly targeting pension funds for failing to manage climate risk, but the pressure is clearly rising. Regulators, campaign groups, and members are increasingly scrutinising whether trustees are meeting their fiduciary duties in a climate-aware way.
Globally, however, litigation is already happening. The McVeigh v. REST case in Australia is a well-known example, where a pension fund agreed to strengthen its climate-risk management after being challenged by a member. This and other international cases are shaping expectations in the UK.
Combined with mandatory climate reporting for larger schemes, they signal that trustees who fail to act on climate risk could face legal challenges in the future, even if the UK hasn’t seen them at scale yet.
PG: It was wonderful listening to you at the recent Global Conference of Actuaries (GCA). Many thanks for these excellent and candid insights.
Can also read here: “If pension funds and insurers remain heavily invested in high-carbon infrastructure… they face both physical risks… and transition risks” | illuminem
The Times Of India Blogs
April 17, 2026
Blog link: Climate vulnerability assessment: Here is a bellwether!
LinkedIn post link: https://www.linkedin.com/feed/update/urn:li:activity:7451170640591642624/?originTrackingId=bRKI3foiVBZSx%2F8WOPjnKQ%3D%3D
Sanctuary Asia
April – May, 2026
Sanctuary Nature Foundation (online version): Rising Losses, Growing Pricing, Increasing Uninsurability – Risky Future?
LinkedIn post: (1) Post | Feed | LinkedIn
The two sets of methi thepla tacos arrived for dinner in one go.
I wasn’t sure if they would make a meal.
They retained their soft exterior, howsoever crisp they appear in the picture, and the methi fragrance dominated all else that went into the dish.
The first bite got me into a generous chunk of cheese. Mind you it is made from buffalo milk (Amul in all probability) – the second desi component in the concoction.
Next to hit my taste buds was the sour flavour of methi. The veggies were deeply embedded – the Mexicans would be duly rewarded for their patience. Some Pax Mexicana…
Unsure of what lay in store, I hedged my bet by ordering a Parsi Dairy Kulfi for dessert.
One need not go solo with the methi thepla tacos!!!
Location: Taj Vivanta, Ektanagar
Mission: Visiting World’s tallest Statue – Statue of Unity
PS: This one takes the crown this week
A tourist sued popular New York tacos chain Los Tacos N.1 because the food was too spicy.
“In a 12-page written opinion, U.S. District Judge Dale Ho found “there is no duty to warn a consumer of the spice-associated risks that come with consuming salsa.”
Source: Jerome Tagger in White Label Impact newsletter.
The Journal, The Chartered Insurance Institute
Feb – March, 2026
Link to the Journal issue: February/March 2026 | The Journal Magazine
Linked post link: Post | LinkedIn
The Climate Adaptation Frontier: Designing Resilience for India’s Extreme Weather Future
February 24, 2026
LinkedIn post:
The Diversity Blog 