Geneva, 21 September 2023: As New York Climate Week is in full swing, the UN-convened Net-Zero Asset Owner Alliance, ahead of its first AGM this week, has published a new discussion paper, “Unlocking Investment in Net Zero,” calling for the removal of key political barriers to achieving net zero greenhouse gas emissions by 2050.
The paper finds vast economic opportunity for transitioning to a 1.5°C scenario, with up to US$275 trillion in climate investment opportunities by 2050, and many grave risks associated with the failure to transition, including up to $4-6 trillion in GDP losses per year by 2050.
In particular, the paper cites that the key decarbonisation technologies are already mature, cost-effective, and deployed at scale. The World Energy Outlook report, to be released next month, is set to confirm that the spectacular growth of clean energy technologies is one of the reasons for which the demand for coal, oil, and gas will peak this decade.
The paper also reveals key political barriers to the net-zero transition, including a lack of public and private investment in infrastructure such as grid upgrades and public chargers for electric vehicles. The Alliance calls on policymakers to remove obstacles.
Further, the Alliance sets out solutions to the adoption of new technologies, such as financial support in the form of subsidies, grants and tax credits, that can be used to improve the risk/return profiles of investments, upgrade public infrastructure and increase sourcing capacity, as well as phasing out government support for brown assets. The report also points to new regulations and standards that incentivise stakeholders as key requirements for unlocking the full potential of the net zero transition.
Günther Thallinger, Board Member, Allianz SE and Chair, UN-convened Net-Zero Asset Owner Alliance, said, “As we have learnt from advanced climate solutions, such as renewable energy and vehicle electrification, advantageous policy environments are a key enabler of uptake. Public subsidies and incentives for electric vehicles, for example, doubled from 2021 to 2022 to about USD 30 billion globally, and we’re seeing similar trajectories for renewable energy and heat pumps.
“We must see these approaches replicated to similarly drive emergent technologies, such as green hydrogen and sustainable aviation fuels, without which it will be impossible to reach net zero given the scale of the transition. Asset owners have a huge role to play, with potential contributions up to USD 31 trillion by 2050, but only by removing current investment barriers will we be able to unlock the full potential of private capital.”
About the UN-convened Net-Zero Asset Owner Alliance
The Alliance is convened by UNEP’s Finance Initiative and the Principles for Responsible Investment (PRI). The 86 members of the UN-convened Net-Zero Asset Owner Alliance have committed i) to transitioning their investment portfolios to net-zero GHG emissions by 2050 consistent with a maximum temperature rise of 1.5°C above pre-industrial levels; ii) to establishing intermediate targets every five years; and iii) to regularly reporting on progress. The Alliance is part of the Race to Zero and supported by WWF and Global Optimism, an initiative led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).