Reaching the world's targets for net-zero emissions (and reducing the risk of displacement, rising cost of living, and health hazards for billions) will require trillions of dollars more in investment, according to a new study by Bloomberg New Energy Finance.
The study indicated that new investments in the energy and materials transition will have to increase at least fourfold over the next ten years if the world is to limit global warming to 1.5 degrees celsius.
Historically, for every dollar spent on fossil fuel energy about 90 cents were spent on low-carbon or renewable energy sources. According to the estimates from BNEF analysts, the ratio should be somewhere around $4 invested in renewables for every $1 allocated to carbon dioxide emitting energy sources.
Much of this funding will come from project finance and lending, but venture capital is needed to invest in new technologies and businesses that can dramatically increase adoption of renewables and expand the types of energy sources available.
Beyond the investment in energy, much of the chemicals businesses that rely on fossil fuels will need to shift to other (hopefully cleaner and less toxic) alternatives to the petroleum derived products they currently use.
Investment in the global energy and materials transition could reach $114trillion by 2050, according to estimates provided by BNEF.
It's "a vital time to kick-start investing in the energy transition and prevent back-loading emission reductions,” BNEF analysts wrote. That's because global greenhouse-gas emissions need to be cut in half by 2030 to avoid the worst effects of climate change.
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