The transition to achieve net-zero emissions by the year 2050 would require an investment of between $1 trillion - $2 trillion (€842 billion - €1.68 trillion) per year - around 1% to 1.5% of global GDP, according to a new report by London-based international think tank the Energy Transitions Commission (ETC).
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The report, Making Mission Possible – Delivering a Net-Zero Economy, was signed by a coalition of 45 leaders from global energy producers, energy-intensive industries, financial institutions and environmental advocates – including ArcelorMittal, BP, Development Research Center of the State Council of China, EBRD, HSBC, Iberdrola, Ørsted, Shell, Sinopec Capital, Tata Group, Volvo Group and the World Resources Institute - which have all made commitments to achieving a carbon-free economy by 2050.
In order to limit global warming to 1.5 degrees Celsius this century, the report argues that global greenhouse emissions need to reach net zero. If this goal can be achieved, says ETC, it would see the reduction in living standards across the world amount to less than 0.5% of global GDP.
The report found that to achieve the 2050 goal, massive improvements in energy efficiency need to be made. The global electricity supply will need to grow by four or five times its current level to reach the necessary 90,000-115,000 terawatt hours, and the pace of solar and wind capacity will have to be five to six times the increase reached in 2019.
Also, a programme of mass electrification for buildings, public and private transport systems and sectors of industry must be introduced, and the report advocates the use of hydrogen in cases where that is not possible.
Any remaining energy should be decarbonised through the use of carbon capture and storage and sustainable bioenergy.
The reports puts forward three "overarching steps" that can be taken, in order to demonstrate that achieving a carbon-free economy is "technically and economically possible" by the middle of the century:
- Using less energy while improving living standards in developing economies, by achieving dramatic improvements in energy efficiency and shifting to a circular economy;
- Scaling up clean energy provision by building massive generation capacities of cheap clean power, at a pace five to six times higher than today, as well as expanding other zero-carbon energy sources such as hydrogen;
- Using clean energy across all sectors of the economy by electrifying many applications in buildings, transport and industry, and deploying new technologies and processes using hydrogen, sustainable biomass or carbon capture in sectors that cannot be electrified, like heavy industry or long-distance shipping and aviation.
"There is no doubt that it is technically and economically possible to reach the zero-carbon economy which we need by 2050; and zero must mean zero, not a plan which relies on the permanent and large-scale use of "offsets" to balance continued GHG emissions," said ETC Co-Chair Adair Turner, adding: "But action in the next decade is crucial – otherwise it will be too late."
Fellow ETC Co-Chair Ajay Mathur added, "In India as in many countries, climate change is already impacting people and disrupting the economy. Governments from developed and developing countries will find in this blueprint practical recommendations on how to enhance their national strategies and ramp-up their commitments as part of the Paris agreement."
The report also outlines three "critical priorities for the 2020s" and suggests practical actions that nations and non-state parties can commit to in the run up to the COP26 United Nations Framework Convention on Climate Change in November 2021 to put mid-century objectives within reach.
- Speed up the deployment of proven zero-carbon solutions – governments, investors and corporates need to work hand-in- hand to build up massive capacities of zero-carbon power generation to enable the clean electrification of the economy.
- Create the right policy and investment environment – by removing fossil fuel subsidies, increasing carbon prices and combining them with border carbon adjustments in the absence of an internationally-agreed carbon price, putting in place regulations – like fuel mandates or lifecycle emissions standards for manufactured products – that create additional incentives for decarbonisation where price signals are insufficient, and working with financial institutions to channel investment not only to green activities but also to energy-intensive industries making their transition.
- Bring the next wave of zero-carbon technologies for harder-to-abate sectors to market – so they can be deployed in the 2030s and 2040s, by focusing public and private R&D on - critical technologies (like hydrogen, sustainable fuels or carbon capture), creating demand for new green products and services (through "green buyers' clubs, public procurement, and product regulations), and financing the first commercial-scale pilots through smart use of de-risking public funds alongside private capital.
The ETC said that the blueprint it has outlined in the report is intended to allow all developed countries achieve net-zero emissions by 2050 including China, which it describes as having the "the resources and technology leadership to become a rich developed zero-carbon economy".
Developing nations, said the ETC, would be able to reach net-zero emissions by 2060 at the latest, but would also require financing to "de-risk and attract private green investment".
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