Have you heard about the Clean Trillion?

Tuesday 09 February 2016

In order to limit global warming to below 2°C and avoid the worst effects of climate change, the world needs to invest more than an additional $1 trillion per year in clean energy through 2050 – the “Clean Trillion.” Reaching the Clean Trillion and putting the world on a path to climate stabilization will require shifting capital away from high carbon fossil fuels – the majority of which must remain in the ground – and into clean energy.

Meeting the Clean Trillion goal will be a tremendous challenge, but it is achievable if businesses, investors and policymakers join forces. Progress is being made toward increasing clean energy investment and reducing capital expenditures for fossil fuels, although there is an urgent need to increase the speed and scale of global clean energy transition.

The Role of the Electric Sector in Achieving the Clean Trillion: Mapping The Gap

Achieving the Clean Trillion will require clean energy transition across all sectors, including electric power, buildings and transportation, among others.  Ceres and Bloomberg New Energy Finance (BNEF) have teamed up to release Mapping the Gap: The Road from Paris, which seeks to underscore how the global transition to clean electric power can be financed. Findings include:

  • The global renewable energy investment opportunity in the electric sector is massive, at $12.1 trillion over the next 25 years. Investment in clean power projects must grow rapidly.
  • There is a $5.2 trillion “gap” between the ramped up renewable energy investment that is projected under current scenarios and what is actually needed for the electric sector to meet its share of carbon emissions reductions needed to achieve the Clean Trillion.
  • A world working to meet the goals of the Paris Climate Agreement (to limit temperature change to 2ºC or below) means investment in new renewable power generation will increase 75% above business-as-usual.
  • While the scale of this new investment opportunity is enormous, it is dwarfed by the capacity of global financial markets to unleash the needed investment capital, creating extensive new opportunities for commercial financiers, institutional investors and others.

Lenders will ultimately decide the direction in which resources flow.

  

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