If you’ve ever carried a credit-card balance, you know the pain of watching interest charges accumulate, turning what was once a high but manageable expense into an express ticket to bankruptcy. The clean-energy transition is kind of like this: The longer we delay paying for it, the more crushing the cost will become.
BloombergNEF’s latest New Energy Outlook, a 250-page State of the Transition address, estimates the world must invest $215 trillion by 2050 to zero out carbon emissions and limit global heating to a merely disastrous 1.75 degrees Celsius above preindustrial averages. That amount is what economists call "a lot.”
But readers with long memories might recall that, just a year ago, BNEF suggested this cost would be $196 trillion. This year’s estimate represents a nearly 10% increase. I know what you’re probably thinking: "Thanks a lot, Joe Biden’s inflation.” But the real issue is that the $1.8 trillion the world invested in the transition in 2023 was well behind the pace necessary to achieve net zero.