Post by account_disabled on Jan 26, 2024 22:42:03 GMT -5
If all the new pledges to reach net zero emissions made at the recent COP26 event are realized, including many by the financial sector, a more rapid and clear path to decarbonization will take place and that could put additional pressure on many industries to also make changes, according to a report by Moody’s. In the financial industry, organizations holding 40% of the world’s assets said they would align their portfolios with science-based targets. If such action takes place, Moody’s says pressure will be put on many industries to also make changes. Moody’s estimates that G20 financial institutions have nearly $22 trillion tied to carbon-intensive industries, representing nearly 20% of their portfolios.
With the implementation of these net zero targets industries WhatsApp Number Database and countries that rely on carbon-intensive production would be pressured to also adjust as it would threaten their business models. Some of the shifts, Moody’s says, include higher spending for deploying and researching cleaner and more efficient energy options. However, such a shift could also lead to greater investment opportunities. Additionally, companies that are at the forefront of clean energy advancement could benefit from government support and their efforts could lead to greater market share if those technologies are commercially viable, Moody’s says. Moody’s says by using numbers from the International Energy Agency it estimates if the new pledges are successfully implemented it would cover 70% of the emissions reductions needed to reach the IEA’s Sustainable Development Scenario by 2050. Before COP26 that number was around 50%. COP26 brought plenty of new commitments, including the world’s two largest emissions producers in the United States and China saying they will work together to develop specific targets, policies and technologies to curb emissions. As far as specific goals, governments and automakers pledged to phase out gas-powered vehicles by 2040 and Moody’s says that industry has been one of the best at transitioning.
In terms of making transitions, energy storage is already increasing at a substantial rate. Some of the commitments made at COP26 include the US saying it would reach net zero emissions by 2050, China saying it would do so by 2060 and India by 2070. Additionally, 23 countries said they will phase out coal power, including five of the top-20 coal power producers. More than 100 countries also joined a coalition led by the US and the European Union to cut 30% of methane emissions by 2030. Moody’s says pressure will remain modest for many countries and industries unless these commitments are reinforced with substantial action. It says the pressure is currently low and manageable because the pace of policy and market shifts lags behind the ambition of the net zero commitments. Still, the announcements have made the likelihood of clean energy transition a reality. Making energy transitions will not be uniform by industry or region regardless of the pace of achieving goals, Moody’s says, especially considering varying policy and technology implementation.