Sustainability and Climate Risk (SCR) — Question 26

A pension fund climate risk analyst evaluates the company portfolio under different climate scenarios. The analyst identifies technological advancements and activities that must occur at a global scale to realize each scenario outcome.
Under a 1.5°C degree scenario, what development must occur?

Answer options

• A. Massive roll out of direct air capture technology.
• B. The global levelized cost of energy for solar energy falls below USD 100 per MWh.
• C. An international cap-and-trade system reduces overall GHG emissions.
• D. Large afforestation projects lead to ecosystem restoration.

Correct answer: A

Explanation

The correct answer is A because under a 1.5°C scenario, the deployment of direct air capture technology is essential for reducing atmospheric CO2 levels to meet climate targets. While options B, C, and D are important for climate action, they do not directly address the specific technological advancement required to achieve the 1.5°C goal.