Do something. Now. That is the climate change activist’s refrain in the 21st century. It is loud and getting louder.
But the gap between demanding action and detailing what action should be taken remains wide.
Wider still is the gap between demanding action and detailing how it will be financed.
The bill is significant for accelerating the energy transition the world needs to achieve the 1.5 C ceiling on global warming increases now widely accepted as the global goal, regardless of its economic consequences.
For example, the International Energy Agency figures it will require an increase in annual clean energy projects and infrastructure investment to nearly US$4 trillion by 2030.
The good news on that foreboding climate horizon is that, along with being unavoidable, the multitrillion-dollar bill for the global green transition is affordable.
That is one of the key points in the Financing the Energy Transition portion of DNV’s Energy Transition Outlook 2021. The maritime industry risk-management company bases its math in part on the view that while global GDP will continue to grow along with population, the percentage of that GDP devoted to energy expenditure will fall as renewable power generation and energy efficiencies increase.
So if current energy expenditure were to remain constant, DNV estimates surplus funds to invest in clean energy would grow by around US$2 trillion per year and reach US$63 trillion by 2050. That, it concluded, would be more than enough to finance the massive shift needed for Paris Agreement compliance.
But those are just numbers.
They cannot be tackled ad hoc or by any one side of the economic equation acting alone. This is a global challenge that requires global co-ordination, co-operation and buy-in.
So what needs to be done, needs to be at home and abroad starting with government agreement on, and co-ordination of, carbon pricing and private-sector investment committed to effective and focused renewable energy infrastructure and generation.