Governments and companies around the world will need to invest at least $92 trillion by 2050 to reduce CO2 emissions fast enough to avoid the worst effects of climate change, Bloomberg reports.
This is the latest estimate by analysts at BloombergNEF that these huge investments are needed to rapidly electrify the global economy and eliminate dependence on fossil fuels.
Investments in the infrastructure needed to enable the energy transition will need to grow from $1.7 trillion in 2020 to an average of $3.1 trillion to $ 5.8 trillion a year by 2050, BNEF analysts say. This means that the final bill could amount to as much as $173 trillion, eight times more than the US Gross Domestic Product in 2019, according to Agerpres.
This level of spending would help limit the increase in global average temperature to 1.75 degrees Celsius, compared to the already warming of 1.2 degrees Celsius. But without new actions, phenomena such as heat waves, floods and forest fires will become more frequent, dangerous and costly. Extending the role of electricity is the basis for all hopes for a drastic reduction in greenhouse gas emissions.
According to the BNEF, more than three-quarters of the potential emission reductions in this decade would come from electricity supply and increased use of wind and photovoltaic energy. Another 14% reduction in emissions in this decade could be achieved through the transition of vehicles, homes and industries from burning fossil fuels to electricity. Hydrogen would also play an important role, and demand for hydrogen would explode.
Overall, electricity production will have to at least double by 2050, to 62,200 Therawatt hours, accounting for almost 50% of final energy consumption, compared to about 19% today. A scenario in which renewables are the dominant source of energy would require even greater electricity production. But all this electricity production will need time for planning, financing and construction.
In all BNEF scenarios, hydrogen will have to be a more important source of energy for areas such as heavy industry and chemical production. This could lead to a demand of up to 1.318 million tonnes of hydrogen in 2050, accounting for 22% of final energy consumption.
