GreenEnergyRevolution

STRATEGIC FORESIGHT FOR SUCCESSFUL NET-ZERO TRANSITIONS

Green Energy Revolution Green investment accelerates the net-zero transition POSSIBLE 2030-2050 DISRUPTION Central banks and finance ministries in several leading economies engage in large-scale climate spending. Spending plans rivalling the Second World War are enacted to support and expand green infrastructure. The world’s richest governments de-risk investment in several green technology sectors, stimulating private investment, and causing former fossil fuels companies to pivot into green technologies. Funding of research and product subsidies catalyses technological breakthroughs in energy transportation and storage, as well as carbon capture. Green industries become a core component of the global economy and the largest firms are among the most powerful and profitable companies in the world.

CONTEXT

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Net-zero strategies are based on forecasted timelines for innovations in the energy, transportation and utility sectors. For example, the IEA’s Net Zero 2050 Roadmap calls for 30 percent of new trucks sold to be electric by 2030 and for 45 percent of total airline fuel to be bio-kerosene by 2050. In the 2010s, there was a downturn in clean tech investments, but the in recent years, the outlook for green investment is becoming more positive.

Early-stage investment is increasing, and large commercial and industrial power consumers are setting targets for carbon-free energy consumption. This creates a stronger market for renewable energy. Carbon capture, use and storage is a major x-factor that could shift how drastically CO2 emissions need to be reduced in order to fulfil net zero pledges. How technology evolves and consumer behavior changes over the next decades is subject to significant uncertainty.

Source: Statista

This series is part of the Strategic Foresight for Successful Net-Zero Transitions toolkit which assists governments and organisations to develop forward-looking, adaptive and future-ready strategies for net-zero emission transitions.

Each part of the series showcases one “Possible Disruption” during the 2030-2050 period that could generate new opportunities or challenges for public policy. Each disruption was developed with foresight, academic and policy experts and represents a plausible extreme in a rapidly changing and uncertain future.

SIGNAL Electric trucks may soon be able to transport a payload equal to that of diesel trucks while weighing only slightly more.

SIGNAL In 2019, Amazon pledged to achieve net-zero emissions by 2040 and launched a $2 billion Climate Pledge Fund for green technologies.

SIGNAL European conglomerate Airbus is considering three different concepts for zero-emissions commercial aircrafts, and it hopes to have one service by 2035.

POTENTIAL IMPLICATIONS Breakthroughs in renewable energy technologies could open up new industries and opportunities for development. They may also provide valuable breathing room if progress in other important areas for emissions reduction fall short. These breakthroughs could also lead to underinvestment in emissions reduction or complacency in other sectors (i.e. transport and agriculture). Ensuring that other sectors do not fall dangerously short of their net zero commitments because there is a perception that technology can offset all emissions may become a policy challenge.

Significant breakthroughs in carbon capture, use and storage could mean that more emissionsintensive development models may still be an option for emerging economies. This could contribute to faster economic growth and rising standards of living in the developing world. However, it presents a potential risk of biodiversity loss and greater deforestation if less emphasis is placed on preserving carbon sinks due to technological breakthroughs. In the most miraculous carbon capture, scenario, a divide could arise between those who believe there is a need for further environmental action for ethical reasons and those who want to minimise disruption to national development pathways and people’s day-to-day lives.

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Significant reskilling could be necessary in many sectors that are heavily disrupted by a faster than expected green transition. This transition brings with it significant creative destruction, rapidly changing jobs for professions in the energy and transport sectors. There may also be many investors who are over-leveraged on fossil fuels and stuck with stranded assets.

QUESTIONS FOR POLICYMAKERS

POLICY RESPONSES

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What steps can be taken to has access to the necessary technologies and inputs such as critical raw materials?

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What measures are needed to ensure equitable and affordable distribution of green technology?

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What supports are needed to ensure a just transition for workers from displaced industries?

The Government Pension Fund (GPIF) in Japan is the world’s single largest pension fund. In 2015, it took first steps into sustainable investing by signing the Principles of Responsible Investing. In 2017, GPIF revised its investment principles to integrate environmental, social and governance (ESG) factors into all of its asset classes. GPIF framed ESG as a way to mitigate risk and convinced other ass et management firms to follow suit. GPIF has played a large role in mainstreaming ESG investing globally.

STRATEGIC FORESIGHT FOR SUCCESSFUL NET-ZERO TRANSITIONS www.oecd.org/strategic-foresight | foresight@oecd.org