WEF Says $13.5 Trillion Needed To Fast-Track Decarbonisation Of Key Sectors
Institutional investors and multilateral banks are identified as key players in providing access to low-cost capital linked to emissions targets
A new report from the World Economic Forum (WEF) emphasises the need for USD 13.5 trillion in investments by 2050 to facilitate the transition to a more sustainable and carbon-neutral future. The report highlights the imperative for significant investments, particularly in the production, energy, and transport sectors, to achieve net-zero targets set by major producing countries and regions, including India, China, the US, and the EU.
The World Economic Forum Net-Zero Industry Tracker 2023 report, developed in collaboration with Accenture, assesses progress towards net-zero emissions in eight industries responsible for 40 per cent of global greenhouse gas emissions. These industries, such as steel, cement, aluminium, ammonia, oil and gas, aviation, shipping, and trucking, heavily rely on fossil fuels, presenting complex challenges for decarbonisation.
To accelerate industrial decarbonisation, the report advocates for global funding and stronger policy incentives for clean power, clean hydrogen, and carbon capture technologies in industrial clusters. The USD13.5 trillion investment estimate is based on average costs for clean power generation, including solar, offshore, and onshore wind, nuclear, and geothermal, as well as costs for clean hydrogen production, carbon transport, and storage.
The report stresses the importance of establishing consistent and stable regulatory frameworks with well-defined timelines to mitigate risks associated with evolving policy regimes. While carbon pricing, tax subsidies, and public procurement can support mobilising necessary investments, the report acknowledges the challenges of raising capital for high-risk projects with unproven technologies in the current macroeconomic environment.
Institutional investors and multilateral banks are identified as key players in providing access to low-cost capital linked to emissions targets. The report also highlights national-level action plans and roadmaps for clean hydrogen adoption in countries like India and China, as well as guiding principles agreed upon by G20 member countries to facilitate the production, consumption, and global trade of clean hydrogen.
(Inputs from PTI)
