A new report written by the Green Growth Action Alliance in conjunction with the World Economic Forum (WEF), has estimated that around $700 billion a year must be invested in a variety of low carbon projects around the world in order to prevent climate change and secure the development of the green economy.
The vast sum of capital required will be invested in clean energy infrastructure, sustainable and low carbon transport, and energy efficiency improvements for buildings, all with the aim of limiting the global average temperature increase to less than two degrees above pre-industrial levels.
The report stated that, “as a result of the clear evidence of negative climate change impacts today, and the potentially devastating impacts in the future, greening investment is a pre-condition for a stable, vibrant and inclusive global economy.”
The report advises governments to re-evaluate their investment priorities, shifting their targets, and increasing capacity towards a greater focus on low-carbon projects.
Effective policies are already in place that encourage private investment and efficiently deploy public finance, however they must be scaled up considerably.
More investors are seeking to diversify their portfolios and have begun to explore unconventional assets. With the pace that clean energy technologies are being adopted at the moment, investing in infrastructure can provide a stable return, and offers a great opportunity to enter a growing market.
By Joao Peixe, Oilprice.com