G20 countries must boost investment by $35 trillion to reach net zero, study finds
In New Delhi, According to McKinsey research, the G20 economies would need to spend an additional $35 trillion this decade in order to stay on track for net zero greenhouse gas emissions by 2050.
“G20 economies have reduced emissions in a noticeable way in recent years, but to meet the deadline for achieving net zero, CO2 emissions must still decline by approximately 50% by 2030 compared to levels in 2020.
To successfully restructure the world’s energy and land use systems, a significant portion of the investment needed for the transition to a low-emissions economy would need to be invested upfront, according to analysts at the management consulting firm.
In conjunction with the B20 meeting, the report was made public.
In order to put that into perspective, the G20 economies must cut their annual CO2 emissions by roughly half by the end of this decade, from about 31 gigatons today. Germany has the biggest reduction needs among high-income countries, whereas China and some Latin American nations have the highest requirements for emissions reduction among upper-middle-income nations.
Experts believe that business-led solutions can help eliminate some of the net zero gaps by providing a sizeable fraction of the funding needed to achieve sustainability targets.
According to analysts, societies would need to take into account increased public-private commitment and collaboration, new incentives, and even more audacious innovation possibilities.
“Market responses to new incentives for net zero occur when subsidies or other forms of public support crowd in more private spending, as could regulatory and policy changes. For example, government grants and concessions, or funding from state-owned enterprises and development finance institutions could help improve the risk and return profiles of investments. Greater public support could also further accelerate technology learning, resulting in avoided spending towards the net zero investment gap,” they said.
Additionally, new high-growth prospects in a variety of industries, including healthcare and renewables, can provide long-term economic growth that advances sustainability and inclusion goals.
Content Credit: Times of India