Net Zero climate targets to cost $276 trn
Sopuruchi Onwuka
Reaching the climate redemption targets set by the world governments and institutions would task the global economy with significant $276 trillion between 2020 and 2030.
The huge figure translates to annual cost of e $9.2 trillion in cumulative spend on completely offsetting carbon dioxide emissions or reducing same to about 1.5 degrees Celsius.
Industry consultancy firm, McKinsey, said the monumental amount of money would be required in the next three decades to pull global warming back to levels where impact in climate would be mild.
The company stated in its latest report on Wednesday that additional expenditure equivalent to about 50 percent of global corporate profits would also be needed for investment in controlling global warming.
According to McKinsey, the money would be used on deployment of new physical assets and decarbonisation of existing assets.” The firms said it has accounted for the cost of keeping supply chains stable during the energy transition, as well as broad energy investment.
It added that spending to support other adjustments like reskilling and redeploying workers, compensation for stranded assets, and loss of value pools in specific parts of the economy are not part of the estimate.
It said its calculation was much higher than most other estimates by economists but stressed such investments could be lucrative and the long-term costs of not doing enough to tackle climate change would be greater.
The Oracle Today reports that the global emergency on global warming has triggered a number of coordinated measures, including energy transition, as the world seeks to control the impact of industrial activities on the environment.
McKinsey painted a picture of grim global options between rising energy bills on consumers and more extreme weather. It explained that the world is already spending $5.7 trillion a year to lower the impact of fossil fuels and use alternatives, saying that additional $3.5 trillion every year from 2021 to 2050 would be required for alternative energy development and land use management, including agriculture to limit global warming.
“That is the equivalent of half of all corporate profits in 2020. It is the equivalent of one quarter of all tax revenue, or 7% of household spending,” the company stated.
