Although governments and companies are increasingly committed to actions against climate change, there are still significant challenges standing in the way.
The scale of the economic transformation that a net-zero transition would entail and the difficulty of balancing the substantial short-term risks of poorly prepared or uncoordinated action with the longer-term risks of insufficient or delayed action, are considered of major importance.
Capital spending on physical assets for energy and land-use systems in the net-zero transition between 2021 and 2050 would amount to about $275 trillion, or $9.2 trillion per year on average, an annual increase of as much as $3.5 trillion from today.
To put this increase in comparative terms, the $3.5 trillion is approximately equivalent, in 2020, to half of global corporate profits, one-quarter of total tax revenue, and 7 percent of household spending. An additional $1 trillion of today’s annual spend would, moreover, need to be reallocated from high-emissions to low-emissions assets.
The Net-Zero Transition Equation is not an easy one and requires charismatic leadership with strong problem-solving skills!
Read more HERE in this exceptional McKinsey report, a thorough analysis of 69 countries which demonstrates, beyond any doubt, that the challenges of the energy transition to zero carbon by 2050 are global.