US$13.5 Trillion Needed to Fast Track Climate Transition

A robust enabling environment is needed to meet the US$13.5 trillion in investment needed to ensure a global transition to net zero greenhouse gas (GHG) emissions by 2050, according to a new report by the World Economic Forum (WEF). The 2023 Net Zero Tracker, which assesses the decarbonisation progress of eight of the most carbon-intensive industries – including aviation, shipping, and oil and gas – has outlined pathways to accelerate emissions reductions, including investments in green hydrogen, infrastructure, and carbon capture, utilisation and storage (CCUS), as well as established renewable energy sources like solar and wind. Carbon pricing, tax subsidies, public procurement, and the development of strong business cases can support in mobilising necessary investments, the report said. However, it noted that raising capital for high-risk projects with unproven technologies could be challenging in the current macroeconomic environment, thus underlining the importance of institutional investors and multilateral banks providing access to low-cost capital linked to emissions targets. It is also important to adapt financial models to the needs of various industries and regions, WEF said. Roberto Bocca, WEF’s Head of Centre for Energy and Materials, said: “Significant infrastructure investments are required, complemented by policies and stronger incentives so industries can switch to low-emissions technologies while ensuring access to affordable and reliable resources critical for economic growth.”

 

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