Counting Cash in Paris Aligned Pathways

Projected energy investment requirements under IEA and IPCC de-carbonization scenarios

As policy makers endeavor to keep global CO2 emissions in check, debate swirls over how much capital will be needed to transition swiftly but smoothly from fossil fuel reliance to cleaner sources. The financial, business and policy-making communities lack consensus over what energy investment is compatible with 1.5°C “pathways”. This work examines potentially acceptable dollar ranges under four of the world’s best publicized Paris-aligned scenarios.

While many have prepared long-term scenarios, we focus here on four pathways produced or evaluated by major intergovernmental bodies the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).

Extrapolating from three IPCC scenarios and one IEA scenario, BNEF pegs required investment at $1.1-1.8 trillion per annum through 2030. Through 2050, capital needs range $0.6-1.7tr/yr.

The majority of fossil investment goes to maintaining delivery and consumption infrastructure required to ensure the world transitions smoothly to cleaner sources.  Oil stands to receive most investment, followed by natural gas. Coal trails far, far behind falling almost to zero soon after 2030 – essentially stopping except for maintenance of existing facilities.

Renewables investment varies but accounts for about 75% of investment in electricity supply.  Investments to 2030 range from $0.7-1.0 trillion. To 2050 the range of annual investment in different scenarios varies from $0.3-1.0 trillion reflecting the divergent paths each scenario takes to reach 1.5°C.

The report can be found here.

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
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