The findings of this research serve as a clear call for more thoughtful and decisive action, taken with the utmost urgency, to secure a more orderly transition to net zero by 2050. At the same time, all countries will have growth prospects, from endowments of natural capital such as sunshine and forests, and through their technological and human resources. The effects within developed economies could be uneven, too for instance, more than 10 percent of jobs in 44 US counties are in fossil fuel extraction and refining, fossil fuel–based power, and automotive manufacturing.

And countries like India would also face heightened physical risk from climate change. Developing countries also have relatively greater shares of their jobs, GDP, and capital stock in sectors that would be most exposed examples include India, Bangladesh, Kenya, and Nigeria. To decarbonize, lower-income countries and fossil fuel resource producers would spend more on physical assets as a share of their GDP than other countries-in the case of sub-Saharan Africa, Latin America, India and other Asian nations, about 1.5 times or more as much as advanced economies to support economic development and build low-carbon infrastructure.

Job losses would particularly affect workers in fossil fuel–intensive or otherwise emissions-intensive sectors. Job gains would be largely associated with the transition to low-emissions forms of production, such as renewable power generation. The total cost of ownership of EVs could be lower than ICE cars by about 2025 in most regions, even as costs for steel and cement production could rise. Each of the most exposed parts of the economy will be differentially affected. A further 10 percent of GDP is in sectors with high-emissions supply chains, such as construction. Approximately 20 percent of global GDP is in these sectors. The sectors with the highest degree of exposure are those which directly emit significant quantities of greenhouse gases (for example, the coal and gas power sector) and those which sell products that emit greenhouse gases (such as the fossil fuel sector and the automotive sector). It is the simulation of one hypothetical and relatively orderly pathway toward 1.5☌ using the Net Zero 2050 scenario from the Network for Greening the Financial System (NGFS).Īll sectors of the economy are exposed to a net-zero transition, but some are more exposed than others. Our research is not a projection or prediction and does not claim to be exhaustive.

It would also bring growth opportunities, as decarbonization creates efficiencies and opens markets for low-emissions products and services. The transition would prevent the buildup of physical climate risks and reduce the odds of initiating the most catastrophic impacts of climate change. At the same time, it is rich in opportunity. The transition is also exposed to risks, including that of energy supply volatility. Spending would be front-loaded-the next decade will be decisive-and the impact uneven across countries and sectors. Accounting for expected increases in spending, as incomes and populations grow, as well as for currently legislated transition policies, the required increase in spending would be lower, but still about $1 trillion.

To put it in comparable terms, that increase is equivalent to half of global corporate profits and one-quarter of total tax revenue in 2020. The transformation of the global economy needed to achieve net-zero emissions by 2050 would be universal and significant, requiring $9.2 trillion in annual average spending on physical assets, $3.5 trillion more than today.

3 stacks of high society meaning