Approximately USD50 trillion in incremental investments is required by 2050 to transition the global economy to net-zero emissions1. Much of the emissions abatement post-2030 will rely on breakthrough technologies such as hydrogen-based fuels, bioenergy and carbon capture, utilisation and storage solutions. In order for successful expansion of these solutions, significant scale-up and capital is required. This report produced by the World Economic Forum highlights that critical decarbonisation technologies will need at least ‘10x’ investment to hit zero emissions targets.
Experts from over 50 financial institutions, including banks, insurers, and asset managers, and the public sector have been brought together to develop financing blueprints and policies to mobilize investment in these technologies. Furthermore, it is outlined how to address the supply-and-demand-side gap to achieve significant scale-up in these technologies.
This report highlights that for effective scale-up of these technologies, the innovative blend of capital supported by an enabling ecosystem is required, where both private and public capital are brought together in technology-specific blueprints. Secondly, that transformative business models are essential where industry and capital providers can work together to establish new contracts and ways of doing business to increase commercial success. Finally that targeted public intervention is critical, focused on the design of incentive schemes rewarding early movers adopting innovative technological solutions and de-risking schemes to mitigate investment risks unique to these solutions.
This report, supported by HSBC, provides a set of financing approaches and de-risking solutions to support the scale-up of vital climate breakthrough technologies. This report seeks to initiate an important discussion on how to rapidly accelerate the deployment of capital towards breakthrough technologies and provide a blueprint for both public and private investors in accelerating the transition to net-zero.
1Energy Transitions Commission, Making Mission Possible: Delivering a Net-Zero Economy, 2020