Integrating political economy and financial markets in qualitative scenario analysis to elicit EU decarbonization pathways

Limiting global warming in line with the Paris Agreement requires net-zero emissions by mid-century. To address uncertainties in this transition, prior research has developed low-carbon scenarios. We contribute by eliciting expert judgement through online surveys with 21 experts and applying the Cross Impact Balances method to construct exploratory qualitative scenarios for the European Union. These scenarios complement quantitative approaches and reflect interactions among financial markets, technological innovation, political economy, and climate policy variables. We identify two internally consistent scenarios: one aligned with mitigation goals and one diverging. The mitigation scenario leads to 1.5 °C warming and features high and stable CO 2 prices, a green mandate from the European Central Bank, high-quality climate risk data, accelerated economic development, and reduced inequality, despite public resistance and corporate lobbying by high-carbon sectors. Within the expert-based scenario analysis, results indicate that green financial policies are not essential for shifting market expectations towards the low-carbon transition.