It is the simulation of one hypothetical and relatively orderly pathway toward 1.5☌ using the Net Zero 2050 scenario from the Network for Greening the Financial System (NGFS).Īll sectors of the economy are exposed to a net-zero transition, but some are more exposed than others. Our research is not a projection or prediction and does not claim to be exhaustive. It would also bring growth opportunities, as decarbonization creates efficiencies and opens markets for low-emissions products and services.

The transition would prevent the buildup of physical climate risks and reduce the odds of initiating the most catastrophic impacts of climate change. At the same time, it is rich in opportunity. The transition is also exposed to risks, including that of energy supply volatility.

Spending would be front-loaded-the next decade will be decisive-and the impact uneven across countries and sectors. Accounting for expected increases in spending, as incomes and populations grow, as well as for currently legislated transition policies, the required increase in spending would be lower, but still about $1 trillion. To put it in comparable terms, that increase is equivalent to half of global corporate profits and one-quarter of total tax revenue in 2020. The transformation of the global economy needed to achieve net-zero emissions by 2050 would be universal and significant, requiring $9.2 trillion in annual average spending on physical assets, $3.5 trillion more than today.

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