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For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only. BNY Mellon Investments Switzerland GmbH is a financial services provider in Switzerland and is required to categorise clients, excluding financial intermediaries, in accordance with the Financial Services Act (FinSA). For the purposes of this communication, we have categorised you as a professional client. Professional clients are entitled to provide notification in writing if they wish to be re-categorised.
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IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
9 December 2021

Are 2050 carbon emissions goals achievable?

How much of the world’s capital stock would need to be replaced or retrofitted in order to meet the net zero target by 2050?

 

The answer, basically, is a lot. These are massive numbers. The top-line number is about US$90 trillion. We’re still debating this, there are still conceptual issues out there we’re talking about, but let’s consider the logic.

 

Broadly speaking, across the world over the next 30 years, we’ll need about US$550 trillion of investment in clean capital, of which $90 trillion is ‘truly green’. To put that into context, global GDP is about $85 trillion at the moment. So, it’s multiples of one year’s worth of GDP. Of course, we’re doing this over 30 years, so accumulate up those 30 years, that’s $550 trillion in investment, at around 15% ESG investment of GDP. That’s not far from the normal rate of investment we’ve seen historically.

 

The big-picture conclusion is that greening the world’s capital stock is perfectly feasible, and much of it can be done gradually.

 

Shamik Dhar, chief economist, BNY Mellon Investment Management.

 

Doc ID: 781862

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