A changing climate, and the eventual efforts of governments (however reluctant) to deal with it, could have a big impact on investors' returns. Companies that produce or use large amounts of fossil fuels will face higher taxes and regulatory burdens. Some energy producers may find it impossible to exploit their known reserves, and be left with "stranded assets" - deposits of oil and coal that have to be left in the ground. Other industries could be affected by the economic damage caused by more extreme weather - storms, floods, heat waves and droughts.
On the basis of the above passage, the following assumptions have been made:
- Governments and companies need to be adequately prepared to face the climate change.
- Extreme weather events will reduce the economic growth of governments and companies'in future.
- Ignoring climate change is a huge risk for investors.
Which of the above assumptions is/are valid?