BloombergNEF’s extensive New Energy Outlook report, which spans 250 pages and analyzes 18 million data points, reveals that governments and companies must invest an additional $34 trillion by 2050 to achieve net-zero emissions.
This figure surpasses expectations by 19%, highlighting the urgent need for extra support in sectors such as electric vehicles, renewable energy, power grids, and carbon capture.
Despite the pressing need for action, the clean energy transition faces challenges.
Climate policies have become contentious political issues in the US and Europe, while renewable project developers encounter obstacles like higher interest rates and inflation, diminishing the attractiveness of potential investments.
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“It is somewhat encouraging that we’re so near, but at the same time, it’s also so far because a lot of these investments aren’t fully profitable without further action,” said David Hostert, global head of economics and modeling at BNEF.
BloombergNEF’s calculations focus solely on the initial capital required to construct green infrastructure and exclude ongoing operating expenses.
Consequently, scenarios that rely excessively on fossil fuels, rather than transitioning to net zero, could potentially incur higher overall costs. However, BloombergNEF has not conducted these specific cost assessments yet.
