Financing the gap a blueprint for decarbonizations

There is still a significant gap between the capital needed to achieve Net Zero and that being delivered. Mobilizing investment to support faster decarbonization will only be possible through unprecedented regulatory reform and international cooperation.

Read Time

8 mins

Published Date

Nov 3 2022

Net Zero will involve massive investment in physical assets and innovation, and mobilizing that capital will require major regulatory and market reform. In this report we explore the dynamics shaping global energy markets and the challenges of transitioning to a low-carbon economy. We also identify 18 ways to accelerate the shift, from reforming corporate governance rules to reducing the liability risks around carbon capture, utilization and storage.

Summary

Building new, cleaner infrastructure is costly, and in some parts of the world, high-carbon plants have years of operational life left to run. Inflationary pressure in domestic markets and the impact of the war in Ukraine on energy security and supply are also likely to slow down progress towards meeting 2030 goals. 

Financing scaled innovative systems such as hydrogen supply chains and carbon capture usage and storage (CCUS) to combat emissions will require decisive policy and collaboration among governments, investors and business. Subsidies and public funds will be key, but it’s private finance that will close the gap.

To enable stakeholders to compare company performance, authorities must collaborate in harmonizing international reporting standards. In the meantime, regulators are pursuing investigations into allegations of greenwashing among financial institutions, asset managers and pension fund trustees.

Project development and finance