Viewpoint: Chief Economist

Going for the green diagonal

  • 19 April 2021
  • 5min read

Key points

We look at an understated aspect of the US administration’s “green conversion”, the role of the federal regulatory agencies, in the context of the US attempt to assert global leadership in the fight against climate change.


The US administration’s green investment plan is spectacular and understandably grabs global attention, but we think a more discrete thread of US activism in the fight against climate change deserves some attention: federal regulatory agencies are stepping up their efforts in embracing green issues. The legal ramifications of their approach are often complex, but it can be an effective accelerator of the ecological transition in the US.

The EPA is reconsidering a petition to include CO2 emissions in the scope of the National Ambient Air Quality Standards framework, which would force all 50 states to design a carbon strategy, with penalties in case of non-attainment, without the need of congressional action. In practice, it could be a cumbersome approach and may not be the simplest way to advance the fight against climate change in the US, but it may convince moderate Democratic and Republican Senators to reach a compromise with the White House on the green investment plan. At the same time, the SEC is stepping up its efforts in the field of green finance regulation, an area in which the US has traditionally been a laggard.

Joe Biden has convened a meeting of 40 heads of government this week to “build momentum” ahead of COP26. The US clearly wants to assert some leadership on the green transition. They probably see China as their main competitor on this, as on many other issues, after Beijing’s unexpected pledge last year to reach “net zero” by 2060. However, on the regulatory aspects, and especially on green finance, the real competitor may well be the European Union. The EU is ahead, but the US clearly want to catch up fast. An issue, in terms of collective welfare, is whether some harmonization towards a common benchmark will be possible to build.

Also, this week we look at the progress in the European vaccination programme, exploring some of the supply constraints ahead. We continue to think that ensuring collective immunity at the beginning of Q3 will be difficult and provide some quantification of the “tourism crash” of last summer.

Related Articles

Viewpoint: Chief Economist

Dosage Adjustment

  • 20 September 2021
  • 10min read
Viewpoint: Chief Economist

Macrocast Podcast #18: Wind of change?

  • 15 September 2021
  • 15min read
Viewpoint: Chief Economist

Wind of change?

  • 13 September 2021
  • 5min read

    Not for Retail distribution

    This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.

    This promotional communication does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee that forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document / scheme documents, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for professional external advice.

    The products or strategies discussed in this document may not be registered nor available in your jurisdiction. Please check the countries of registration with the asset manager, or on the web site https://www.axa-im.com/en/registration-map, where a fund registration map is available. In particular units of the funds may not be offered, sold or delivered to U.S. Persons within the meaning of Regulation S of the U.S. Securities Act of 1933. The tax treatment relating to the holding, acquisition or disposal of shares or units in the fund depends on each investor’s tax status or treatment and may be subject to change. Any potential investor is strongly encouraged to seek advice from its own tax advisors.

    Past performance is not a guide to current or future performance, and any performance or return data displayed does not take into account commissions and costs incurred when issuing or redeeming units. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Exchange-rate fluctuations may also affect the value of their investment. Due to this and the initial charge that is usually made, an investment is not usually suitable as a short term holding.