Davy Horizons Whitepaper
The Net Zero Transition, Managing Investor Demands - A Financial Stakeholder's View: Blackrock
06th December, 2023
Achieving net zero Greenhouse Gas (GHG) emissions by 2050 at the latest is essential to limiting global warming rise to 1.5°C above pre-industrial levels. To achieve this, global GHG emissions must be reduced by at least 43% by 2030 compared to 2019 levels, and at least 60% by 2035, reaching net zero by 2050. This is the decisive decade to make that happen. Failure to meet net zero will result in stranded assets, a dire future for the next generations and widening inequalities. By 2050, 2.2°C of warming has the potential to reduce global GDP levels by up to 20% as increased storms, wildfires, drought, flooding and crop failures hamper growth and threaten infrastructure2 . By comparison, the cost to tackle climate change is much cheaper at only 1.5% of global GDP, or approximately $1.5-2 trillion a year for the next 30 years.
For business sectors globally, meeting a 1.5°C limit means a GHG emission reduction of 30-gigatonne (GT) carbon dioxide equivalent (CO2 e) annually to 2030 across six sectors4 .
The good news is that mitigation solutions exist for most sectors to close the gap. They have the potential to halve emissions from 2019 levels by 2030 and cost less than USD $100 per tonne of CO2 e.5 The bad news is the world is not on target to limit warming to 1.5°C. Going into COP28 in November 2023 in the United Arab Emirates (UAE), the UN Intergovernmental Panel on Climate Change (IPCC) highlights:
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