The transition to a net-zero emissions world opens up an investment opportunity totaling almost US$200 trillion by 2050 – or thereabouts $7 trillion a year.
EVs (Electric Vehicles) and low carbon energy will be the biggest markets for investors, followed by power grids, according to the latest outlook from BNEF (BloombergNEF).
The research and analytics company has modeled a path to net zero by 2050 and found that the world can limit warming to 1,77°C. To achieve this, “clean energy deployment needs to quadruple by 2030,” said David Hostert, global head of economics and modeling at BNEF and lead author of the report.
“In addition, a large investment is needed in CCS (carbon capture and storage), advanced nuclear technologies and hydrogen”, he highlighted.
Scenarios highlighted in the report
According to research, there are two scenarios:
- Economic Transition Scenario, which does not presuppose any new political action;
- Net Zero scenario, which assumes net-zero global emissions by 2050.
The Economic Transition Scenario requires annual investment to double from the 2021 level of US$2 trillion per year to US$4 trillion, while the Net Zero Scenario requires annual input to more than triple to US$6,7 trillion per year. year.
According to BloombergNEF, the numbers inside the bars show the annual investment in each decade. The numbers above the bars show the total contribution in each decade.
“Such a colossal transformation of the global economy would trigger massive demand for related inputs such as metals. Lithium demand in 2050, from the energy transition alone, appears to be about 17,5 times total demand in 2020, for example,” Hostert reported.
The graph, in this case, includes demand from the energy sector, networks and batteries (stationary energy storage and electric vehicles). The data in the 2020 columns shows the estimated demand from energy transition sectors.
The “2020 total demand” line reflects total global demand across all sectors as reported by the US Geological Survey for refined copper and contained silicon, nickel, cobalt and silver.
In the expert's view, this exponential growth in demand for metals will require new technologies that increase the scale of production, without compromising sustainable extraction.
“We are at that critical fork in the road where what we do today determines whether the world is 2,6°C warmer – under the Economic Transition Scenario – or whether warming is limited to less than 2°C under the Net Zero Scenario” , he concluded.
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