On the basis of the above passage, the following assumptions have been made: 1. Governments and companies need to be adequately prepared to face the climate change. 2. Extreme weather events will reduce the economic growth of governments and companies in future. 3. Ignoring climate change is a huge risk for investors. Which of the above assumptions is/are valid?

UPSC CSAT 2019 Q26: On the basis of the above passage, the following assumptions have been made: — Answer & Explanation

Passage—4

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.

CSAT 2019 · Q26

Reading comprehension Medium

On the basis of the above passage, the following assumptions have been made:

1.Governments and companies need to be adequately prepared to face the climate change.
2.Extreme weather events will reduce the economic growth of governments and companies in future.
3.Ignoring climate change is a huge risk for investors.

Which of the above assumptions is/are valid?

Answer & explanation

Answer: (c) 1 and 3 only

Climate change, and government action on it, can hit investors' returns through taxes, regulation, stranded assets and weather damage. So governments and companies must prepare, and ignoring climate change is a large risk for investors. The passage says industries 'could be affected', not that growth will fall.

✓ 1. Higher taxes, regulatory burdens and stranded assets await unprepared companies, and governments are expected to act 'however reluctant'.
✗ 2. 'Could be affected' is a possibility; 'will reduce' makes it certain, and the 'economic growth of governments' is not discussed.
✓ 3. Climate change 'could have a big impact on investors' returns' — ignoring it is a big risk.

Remember · Match the level of certainty: 'could' in the passage does not support 'will' in a statement.

Question and answer: UPSC's official GS Paper II (2019, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·

On the basis of the above passage, the following assumptions have been made:

Passage—4

CSAT 2019 · Q26

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