RIYADH: A total investment of $13.5 trillion is needed to ensure a carbon-neutral future by 2050, particularly in the production, energy and transport sectors, according to the World Economic Forum.
In its report titled “Net-Zero Industry Tracker 2023,” WEF said that decarbonizing the industrial and transport sector is crucial to achieving a greener future, as these industries emit 40 percent of global greenhouse emissions.
Roberto Bocca, the head of the Center for Energy and Materials at the WEF, said considerable investments are needed in the industrial and transport sector to achieve net-zero targets within the stipulated timeline.
“Significant infrastructure investments are required, complemented by policies and stronger incentives so industries can switch to low-emission technologies while ensuring access to affordable and reliable resources critical for economic growth,” said Bocca.
According to the report published in collaboration with Accenture, the $13.5 trillion in investments is derived from average clean power generation costs of solar, off-shore and on-shore wind, and nuclear and geothermal.
It also accounts for electrolyzer costs for clean hydrogen and carbon transport, as well as storage costs.
The report comes in the same week the 2023 UN’s Climate Change Conference is set to begin, which calls for “dramatic climate action” to close an “emissions canyon.”
In addition to increasing capital expenditures to decarbonize existing industrial and transport asset bases, further investment is needed to build a clean-energy infrastructure, WEF added in the report.
“It is imperative that action is taken soon to both decarbonize and improve energy efficiency; otherwise, unabated fossil-fuel demand in the key industry sectors, which have grown 8 percent on average the past three years, will increase very significantly by 2050,” added Bocca.
Bocca highlighted that global collaboration among industrial leaders, embracing the usage of fuels like hydrogen, and implementing carbon capture, utilization and storage systems will help combat the issues surrounding emissions.
The report added that carbon pricing, tax subsidies, public procurement and the development of strong business cases can support mobilizing necessary investments in the industrial and transport sectors.
WEF and Accenture also stressed the need for public-private partnerships to ensure a sustainable future.
“Collaboration between the public and private sectors is critical to a successful energy transition, and technology can be a key enabler in both managing affordable and reliable access to clean energy and addressing the incremental cost of decarbonization,” said Muqsit Ashraf, who leads Accenture Strategy.
He added: “Additionally, business model innovations can also help stimulate demand and accelerate industrial decarbonization – achieving net-zero objectives and a resilient energy transition.”