The overall long-term targeted impacts of the PACTA project can be summarized a long two key objectives:
- Paris Agreement Art. 2.1c monitoring & reporting. The project seeks to develop a framework used by governments to measure, monitor, and respond to the alignment of financial markets with climate goals. This framework can eventually form part of the UNFCCC stock-take, inform national dialogue around policies, support potential policy adjustments, and allow governments to develop voluntary ‘soft law’ and mandatory ‘hard law’ regulatory frameworks that help to mobilize non-state actors in contributing to and aligning with the Paris Agreement.
- Financial supervision of transition risks. The project seeks to equip financial supervisory authorities with the tools to measure and monitor financial risks in capital markets associated with the transition to a low-carbon economy. The ultimate goal is to reduce both the information asymmetry associated with climate policies and associated market trends between private sector actors and policymakers, ensure a stable and smooth transition to a low-carbon economy that does not disrupt financial markets, and to improve the efficient intermediation of capital in a way that prices correctly long-term risks and by extension reduces the costs of the transition.