Climate Change: World must almost double investment to US$9.2 trillion a year to hit Paris Agreement goals, says McKinsey
- The projected expenditure for a successful transition to cope with climate change is much higher than the US$5.7 trillion spent each year currently
- The additional spending needed is equivalent to half of global corporate profits, or a quarter of total tax revenues in 2020
“While the transition would create opportunities, sectors with high-emissions products or operations – which generate about 20 per cent of global gross domestic product – would face substantial effects on demand, production costs, and employment,” it warned in a new report on Wednesday.
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This transition could result in the creation of some 200 million new jobs, including 8 million in low-emission energy production. However, it could also lead to the loss of 185 million existing jobs, including 13 million in the fossil fuel sector.
McKinsey said the study examined the sectors producing 85 per cent of global carbon emissions and assessed economic shifts across 69 countries.
It simulated and estimated the economic transformation and societal adjustments associated with reaching the global goal of net-zero carbon emission by the middle of this century, based on climate scenarios modelled by the Network for Greening the Financial System (NGFS).