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A new report from Morgan Stanley finds that curbing global warming and reducing net carbon emissions to zero will require US$50 trillion. More specifically, spending in five key sectors in zero-carbon technology is necessary to achieve the goals of the Paris Agreement: renewable energy, electric vehicles, carbon capture, hydrogren and biofuels. This adds to the database of analyses conducted by prominent financial institutions calling attention to climate change and recognising the need for climate resilient investment.
To combat global warming and climate catastrophes currently forecasted for 2050, the world will need to spend US$50 trillion in zero-carbon technology, according to analysts at Morgan Stanley. These estimates come as carbon emissions from fossil fuels reached record-breaking highs last year, highlighting the need for urgent financial action to curb climate change. Previous studies have already spotlighted the need for a “clean energy revolution” and many campaigns have called for urgent divestment away from fossil fuels.
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To prevent the planet from going beyond the Paris Agreement recommendation of keeping temperature rise below 2 degrees celsius, the renewable energy sector will require US$14 trillion of investment to deliver 80% of the global power by 2050. Renewables are set to see the solar energy market take the lead, especially with solar renewables already available for cheap in many Chinese urban cities.
In addition, the report argues that $2.7 trillion to finance biofuel development will be needed to prompt a shift in global transportation, especially in aircraft travel. Currently, the aviation industry is responsible for 2.5% of global greenhouse gas emissions. Since flygskam has taken off and put pressure on the industry, some major airline carrier CEOs have already announced plans to introduce fuel-efficient aircrafts and their commitment to transition to biofuels, but still more investment is necessary to meet goals under Paris Agreement.
Other key investments, including $11 trillion to build electric vehicle factories and charging infrastructure, $2.5 trillion in carbon capture technology, and $20 trillion invested in clean hydrogen-powered fuel for power plants, cars and industries were also advised by the bank’s analysts.
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The Morgan Stanley report comes amid a wave of research conducted by major banking and financial institutions calling for greater attention on the risks of neglecting climate change and acknowledging the need for investment to combat the world’s most pressing issue. Goldman Sachs, for instance, released a 34-page analysis warning the significant damage that global warming will bring to major cities, many of them in Asia. In a similar line, the Global Commission on Adaptation (GCA) report, which saw contributions from Bill Gates, called on trillions to be invested into climate prevention and resilient infrastructure.
Lead image courtesy of US Green Technology.
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