Net zero by 2050? There’s only one way to stay ahead of the spending

Note to reader: Despite any rhetoric to the contrary, I do not see how price inflation nor the upward trajectory in asset prices will achieve any respite to the trend. Even if the fiscal deficit spending ends up only being half of what this article contemplates, I do not see how we can avoid a Soylent Green scenario for the vast majority of the population.

The only means for the average person to stay ahead or to just keep up is to own a portfolio of income generating assets. If any of the numbers this article deliberates becomes a remote reality, the stock prices of the largest and most powerful firms as well as residential real estate values will continue to defy gravity and traditional common sense. However, I have long articulated through positive economic analysis that there is only one way for this to turn out.

There’s only one way for the developed nations to achieve any of the goals Bloomberg outlines below, and that is too spend and generate trillions more in sovereign debt securities. You and I don’t see any of these negotiable debt instruments; only the wealthiest do, and armed with these debt securities, they can continue buying up whatever they wish. There is absolutely no stopping this now.

Unless we have some sort of discerning talent, we will never be able to keep up by earning a wage. Only the most talented athletes and politically correct YouTubers with at least one million subscribers  can stay up with inflation over the long term. Sports team owners will continue to reap large capital gains as well, since the capitalized values of their underlying assets will keep moving north. The rabble need diversions as they continue to be raped financially and medically.

Don’t look to move to any particular country for a reprieve either. Every nation is in on this, including China, Russia, Iran, and the rest of the staged adversaries. At least in the United States we still have guns and property rights.

Of course, the world will never achieve a net zero emissions Utopia, nor will it ever achieve a Star Trek-like scenario where everyone lives together in peace and harmony. But the sovereign nation states can spend tens of trillions of dollars pretending to try. The media can continue fooling us that were all the same, so that there is no bona fide pushback anymore.

There’s only one way out for you and me to survive financially, and that is to own the assets and live below our means so we can hold on to them over the long run. This also means we need to stay out of the doctor’s offices and not succumb to man-made illnesses that are completely avoidable. The goal of the elite is to drain us completely, so that we accept the terms of the surrender. The medical system has been engineered to drain the body one drip at a time.

Is Net Zero by 2050 Still Possible? Yes, But It’ll Cost 19% More

The sun rises beyond wind turbines at a wind farm in Muras, Spain

(Bloomberg) — Governments and companies need to spend an extra $34 trillion on the clean energy transition between now and 2050 to reach net-zero emissions, according to BloombergNEF.

The research group’s 250-page New Energy Outlook report, which crunches 18 million datapoints, says that amount is 19% more than what’s expected in its base case scenario. The finding indicates that sectors from electric vehicles and renewable energy to power grids and carbon capture need extra support.

The clean energy transition has faced resistance in recent years as climate policies have become a political flash point across the US and Europe. At the same time, renewable project developers have come up against higher interest rates and inflation, making the potential return on investments less attractive.

While BNEF earlier this year said global investment in the low-carbon energy transition surged 17% in 2023 to $1.8 trillion, its report Tuesday shows the pace of this spending needs to accelerate as the world continues to warm and bigger solutions are needed sooner.

“It is somewhat encouraging that we’re so near, but at the same time, it’s also so far because a lot of these investments aren’t fully profitable without further action,” said David Hostert, global head of economics and modeling at BNEF.

BNEF split its analysis between two scenarios.

Its base case sees governments relying solely on economically competitive technologies, putting the world on course to warm 2.6C from pre-industrial times. This pathway, dubbed the economic transition scenario (ETS), is still slightly better than what governments are currently committed to doing, but it would lead to catastrophic climate impacts as the world breaches the 2C goal set under the Paris Agreement.

Its net-zero scenario (NZS) assumes governments double down on emissions-reducing technologies with an aim to reach net zero by 2050. If the world follows this path, it still might miss the more ambitious Paris goal of keeping warming below 1.5C — edging closer to 1.75C instead. That could still avoid some irreversible climate damages.

Among the big step changes needed to achieve net zero, the report says every new car sold from 2034 onwards will have to be an electric vehicle. Carbon capture technologies will require $6.8 trillion worth of investment to trap emissions not just from industry, but also the power sector. Power grid projects investments will peak at about $1 trillion per year in the 2040s — similar to the investment required for renewable energy generation in that decade.

“There’s definitely a wake up in national grid companies, but the investment isn’t moving as quickly as it should.” Hostert said.

BNEF’s figures are based on the upfront capital needed to build green infrastructure and don’t include operating expenses. This means any scenario that consumes more fossil fuels than needed for being on track to net zero could ultimately be more expensive to implement — though BNEF has not yet run those calculations.

What is clear from BNEF’s analysis is that the era of fossil fuels dominating the energy system is coming to an end. Whether countries pursue policies needed to get on track for net zero by 2050 or not, the share of renewables in the global electricity mix could still be higher than 50% by the end of the decade.

The New Energy Outlook this year includes analysis of how major economies can meet their climate goals, covering the US, Australia, Japan, China and India along with regional analysis for Europe, Southeast Asia and Latin America. Hostert said that as more and more companies and financial institutions set climate targets, this kind of granular analysis is needed for them to meet those goals.

At the moment the transition is two-paced, with some technologies clearly ahead, while others in desperate need of a harder push. “For renewables, EVs, batteries, if you squint a bit, you can see it could work,” Hostert said. “But then if you look at hydrogen, carbon capture and storage, or nuclear, there are much bigger steps needed.”

©2024 Bloomberg L.P.

Related Posts

3 thoughts on “Net zero by 2050? There’s only one way to stay ahead of the spending

  1. World Economic Forum Founder Klaus Schwab Is Stepping Down

    (Bloomberg) — Klaus Schwab, the founder and executive chairman of the World Economic Forum, is stepping down from active leadership of the body that convenes the annual meetings of global executives and politicians in Davos, Switzerland.

    Schwab, 86, announced his decision on Tuesday and is transitioning to a non-executive role by January 2025, according to a statement on the WEF website.

    “The organization has also been undergoing a planned governance evolution from a founder-managed organization to one where a president and managing board assume full executive responsibility,” the WEF said.

    The body didn’t specify who would take those roles. Semafor reported the decision earlier.

    Schwab started what became the World Economic Forum in 1971 — initially called the European Management Forum — as a symposium on corporate management.

    In the following decades the event ballooned to become an annual gathering of some 2,500 corporate executives, financiers, and politicians and other public figures from more than 100 countries addressing matters such as inequality, migration, digital innovation and globalization.

    Schwab chose the Alpine location of Davos in a bid to make guests feel relaxed and speak freely, according to the Geneva-based nonprofit’s website. With a slogan of “committed to improving the state of the world,” the forum attracts global attention and criticism, as well as a helping of conspiracy theories.

    Schwab, born in Germany, to parents of Swiss origin. While the organization he founded has frequently faced the charge of elitism, Schwab has consistently stressed the need for the kind of global cooperation it offered.

    “Big challenges — environmental, poverty — cannot be solved by governments alone, or by business alone, or by civil society,” Schwab told the Financial Times in defense of the conference in 2020. “You need cooperation.”

Leave a Reply

Your email address will not be published. Required fields are marked *