Global: Over $270tn in climate investments needed to meet 2050 net-zero targets
Source: Middle East Insurance Review | Nov 2022
Climate investments must be made sooner and on a much larger scale if the world is to meet the Paris Agreement and 2050 net-zero targets, according to a new Swiss Re Institute study tracking progress on decarbonising the economy.
Comparing the investments needed to reach net zero with spending to date shows a climate investment gap of more than $270tn in the energy, transport, buildings and industry sectors between 2022 and 2050. This gap can be closed through collective efforts by the public and private sectors, the study said.
The largest investment gap towards net-zero targets is in the transport sector at an estimated $114tn, with most investments needed for electric vehicle infrastructure. In the energy sector, the investment gap is estimated to be $78tn, with the main shortfall in renewable energy and related infrastructure. The buildings and industrial sectors require estimated investments of $65tn and $14tn respectively, with energy efficiency as the main decarbonisation lever for both sectors.
If year-on-year investments are gradually and consistently ramped up beyond the annual growth trend, the gap could close by mid-century, the study said. This can be achieved by increasingly aligning current capital spending with net-zero targets. The bulk of the investment needs to come from the private sectors. The public sector must create the framework for the private sector to redirect existing capital into climate investments. M