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The global transition to a low-carbon future is going to be fundamental, wide-reaching and anything but smooth.

One of the best illustrations is the transport sector, where governments and carmakers are hastening the end of the internal combustion engine (ICE) age. Electric vehicles (EVs) will account for more than half of global vehicle sales by 2040, according to estimates that are probably too conservative.

The transition will be a wave of creative destruction, crippling long-entrenched markets and fostering new ones in their place. The full impacts will challenge economic and social systems to adapt at uncomfortable speeds and result in significant shifts in geopolitical power and relations. While the switch to electric vehicles is being driven primarily by environmental concerns, it could set back the achievement of broader sustainable development goals if the transition is not well managed.

This commentary by IISD Senior Associate Aaron Cosbey was published in World Commerce Review.