A report by CERES, “In Sight of The Clean Trillion”, sees realistic opportunities in the tens of trillions across an array of asset classes in multiple sectors.
The report reviews other studies of the clean-energy funding gap in the interim, and finds not dissimilar numbers in terms of orders of magnitude. A critical conclusion: “While incremental costs of limiting global temperature rise to well below 2 degrees Celsius over preindustrial levels — i.e., a “2 Degree Scenario” (2DS) — may run to trillion of dollars, these amounts are not extraordinary in a global capital investment context, even before considering that these costs are expected to be eclipsed by the economic benefits (inclusive of externalities). In addition, as technology costs continue to fall, these incremental costs are likely to fall as well.”
Author Mark Fulton, a senior fellow at Ceres and veteran economist, strategist and former head of research at Citi, summarises a key change between 2014 and 2018: “Clean energy technologies such as wind and solar have de-risked and become a central competitive threat to fossil fuels and nuclear power, even as incentives decline. Along with corporations, institutional investors have the opportunity to play a key role in the global clean energy transition as the risk and return characteristics of lower-carbon investments are set to increasingly outperform those with carbon risks. Clean energy is rapidly proving its competitive place in the market, and it makes common sense to diversify investments in the face of that reality.”
Image: from the original 2014 report