Achieving Net Zero implies a fundamental transformation of the world economy. A scenario based analysis recently presented by McKinsey looks at how the sectors that generate 85% of overall emissions can deliver the transition required and importantly, what it will cost. The need for careful balance between solving the equation and economic development and inclusive growth is acknowledged, as well as the short-term and long-term risks. Many complex questions are posed, to which some answers are attempted. Its limitations, due to the constantly shifting/diverging nature of its pathways, are also acknowledged.
In conclusion, previous total spend estimates are expected to be exceeded by a ‘meaningful degree’. Between 2021 and 2050 a capital spend of $275 trillion will be required, or $9.2 trillion per year on average. It is yet another tool to help decision makers understand the scale, complexity and urgency of the challenge faced by humanity.
Ref: ‘The net-zero transition: What it would cost, what it could bring’ at mckinsey.com