Financing the Transition to a Net-Zero Future
Produced in collaboration with Oliver Wyman, this report argues that to reduce greenhouse gas emissions and achieve a net-zero future, a multifold increase in private capital flows is nee...
In order to avert a catastrophic climate disaster, global clean energy investments of approximately $4-5 trillion are required annually by 2030 – a more than threefold increase from existing investment levels. Breakthrough decarbonization solutions are required for both energy transition and industrial decarbonization. Per the IEA, technologies that are currently under development will be responsible for over 40% of global greenhouse gas (GHG) emission reductions in 2050. Industrial decarbonization will require new, innovative technologies, such as carbon capture and storage (CCS), green hydrogen, sustainable aviation fuels (SAF) and green ammonia, among others. These breakthrough technologies are in the early stages of development, and are not yet mature or competitive with existing high-emission alternatives. Trillions of dollars in new investments are required to support their commercial-scale deployment and testing. These investments can be capital intensive and high risk, resulting in a global financing shortfall that must be bridged in order to achieve net-zero targets.
The Financing the Transition to a Net-Zero Future (FTT) initiative, a collaboration between the World Economic Forum and knowledge partner Oliver Wyman, was launched in June 2020 to accelerate the mobilization of capital towards these breakthrough technologies. The initiative has engaged a multistakeholder community of financiers, industry stakeholders, philanthropists and public institutions to analyze specific technologies in the key hard-to-abate sectors, develop mechanisms for different stakeholders to co-design solutions, and identify policy interventions necessary to mobilize private capital. Collaborating with the Mission Possible Partnership industry verticals, the initiative has developed financing blueprints for the Aviation, Steel and Shipping sectors based on analysis of specific breakthrough technologies; these blueprints are the subject of the initiative's most recent insight report, "Financing the Transition to a Net-Zero Future."
Partners of the Forum can engage through the initiative's monthly Working Groups, bi-monthly Steering Committees, and other convenings. The initiative will also leverage global events such as the World Economic Forum Annual Meeting, the Sustainable Development Impact Summit and other fora to share key learnings and takeaways.
For more information, please contact Derek Baraldi (Derek.Baraldi@weforum.org).
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