To limit global warming to two degrees Celsius, more than US$270 trillion in investment will be needed by 2050, according to reinsurer Swiss Re, which estimates that at the current rate, the goals of the Paris will only be reached “in 2069”, nearly 20 years late.
The largest investments to be made concern the transport sector, followed by those of energy, construction and industry, according to a study by the Swiss group. According to the calculations of its economists, the amount of additional investments to be made compared to current levels even reaches 290,000 billion taking into account fossil fuels.
“Investments in decarbonization have increased by an average of 5% per year since 2016”, quantified Jérôme Haegeli, chief economist of Swiss Re, who underlines that at this rate, the net zero objectives for CO2 emissions2 will only be achieved almost 20 years late. Put another way: 98% of the way still remains to be covered in terms of investments to achieve these objectives. “If global warming continues on the current trajectory”, the world economy could lose “up to 7 to 10%” in growth by the middle of the century, they calculated, stressing that “every dollar invested” contributes to reducing emissions and mitigating future growth losses.
They estimate the necessary investments at 114,000 billion in the transport sector, in particular to develop infrastructure related to electric vehicles. In the energy sector, economists from Swiss Re estimate the necessary investments at 78,000 billion. , which is an important lever for decarbonization in these two sectors.
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