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JPMorgan Asset Says Climate Risks Loom for Brazil, Russia Growth

  • Both nations face a challenging shift to a low-carbon economy
  • Investors face varied climate policy impact by region, sector
A volunteer firefighter walks along Transpantaneira road at the Pantanal wetlands region in Mato Grosso state, Brazil, on Sept. 11.

A volunteer firefighter walks along Transpantaneira road at the Pantanal wetlands region in Mato Grosso state, Brazil, on Sept. 11.

Photographer: Jonne Roriz/Bloomberg

Emerging markets such as Brazil, Russia and South Africa face a more difficult shift to a low-carbon economy because they lack room to cushion the change by ramping up government spending, according to JPMorgan Asset Management.

The three countries don’t have the headroom to take on more debt to alleviate short-term pain, strategists led by Jennifer Wu wrote in a report Friday, adding India will probably find the transition difficult too. Canada and Australia, also comparatively carbon-intensive, have more room to borrow, they said.