At The Big Zero Show, held at the Coventry Building Society Arena, Vicky Pryce, Chief Economic Adviser at The Centre for Economics and Business Research (CEBR), delivered a thought-provoking address on the critical financial challenges and opportunities in achieving global net zero targets.
Pryce began, acknowledging the complexity of the financial landscape required to combat climate change.
“It’s really about sort of financing, and we heard a little bit about investment and where it’s going to come from. I think that is a very important question, which hasn’t necessarily been answered yet.”
Pryce highlighted the enormous financial requirement needed to achieve net zero, estimating the global need at anywhere between $2.5 trillion (£1.9tn) to $9.5 trillion (£7.4tn) annually over the next decade.
This, she noted, is a “big sum of money,” and the pressing question remains: “Where can it be found?”
She pointed out that global investment in fossil fuels currently stands at approximately $3.5 trillion (£2.7tn) per year.
Pryce suggested that redirecting a portion of these investments toward green initiatives could significantly advance net zero efforts.
However, she also underscored the small percentage of global funds currently allocated to ESG (Environmental, Social, and Governance) investments, describing them as “still very, very small” and fraught with concerns about their actual returns and impact.
Pryce emphasised the prevalence of greenwashing, where companies and investments falsely claim to be environmentally sustainable.
“There is a huge amount of greenwashing taking place,” she warned, stressing the need for robust verification of sustainability claims to ensure that investments genuinely contribute to climate goals.
Addressing the international dimension, Pryce called for developed nations to support the developing world in their transition to sustainable energy sources.
She referenced the 2015 Paris Agreement, which called for transferring $100 billion (£78.8bn) annually by 2020 to assist developing countries.
Pryce highlighted the importance of this support, noting that 75% of global energy use and emissions still come from fossil fuels, with the majority of future energy demand growth expected in developing nations.
Pryce also discussed the competitive landscape between the US and the EU in attracting green investments.
She highlighted the US Inflation Reduction Act, which offers substantial subsidies and tax incentives for green energy investments, and noted the EU’s efforts through its Green Deal.
However, she cautioned that this competition could divert resources away from areas where they are needed most.
In her conclusion, Pryce emphasised the necessity of public-private partnerships and ongoing investment in technological advancements.
“Without that investment, it’s not going to happen at all,” she asserted, underscoring the critical role of collaborative efforts in achieving net zero targets.
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