绿色能源转型融资（英）

FinancingtheGreenEnergyTransitionAUS$50trillioncatchNovember2023FinancingtheGreenEnergyTransition:AUS$50trillioncatch|ForewordForewordTheglobalcommunityhasbeenonajourneyfromskepticismandfearofclimatechangetonowoneofambitiontoseizetheopportunitiesforgrowthanddevelopment.Butthetransitionpathwayisneithercostlessnoreasy.Theenergyandclimatetransitionrepresentsoneofthebiggestmodernizationprojectsoftheproductionsystemofeconomies,worldwide,sincetheIndustrialRevolution;andtheperilsofclimatechangemandatethatthistakesplaceinjustafractionofthetime.Thereporthighlightsthemagnitudeoftheglobaltaskaheadofustoachievenetzeroby2050—aninvestmentaskofaboveUS$7trillionperannumundercurrentfinancingconditions.Butenablingoptimal,low-costfinance,bymakingprojectsbankable,couldhelpoptimizetheglobalinvestmentinitiativeandreducetheinvestmentaskbyaroundUS$2trillionperannum—aUS$50trillionbenefittotheglobaleconomyovertheperiodto2050.Thisglobaltransitionproceedshavinglearnedthelessonofthelast80years—thatgrowthandtheequitabledistributionofthatgrowtharecriticalforasustainablefuture.Thegeopoliticalimperativeforthiscannotbeignoredornotembeddedintoourcollectivethinkinggoingforward.Thisisareporttohelpmaketheeconomictransitionreal—bankable—intheserviceofglobaleconomicgrowthandprosperity.ThisreportonFinancingtheGreenEnergyTransition,isthelatestinDeloitte’sseriesofinsightsfromthemacroanalysisaroundtheglobaleconomicimperativetogettonetzeroinTheTurningPoint,tothecriticalityofskillsinWorktowardnetzero:theriseoftheGreenCollarworkforceinajusttransition,andthepotentialofnewenergyinGreenhydrogen:energizingthepathtonetꢀzero.Thisreportisapracticalcontributiontotheglobaleffortinrecognizing,atitsfoundation,thatfinanceiscriticaltoeconomicgrowthandakeydriverofthiseconomicmodernizationeffort.Eachday,theglobalcommunity,andDeloitte’sclients,stakeholders,andpeopleconfronttherisksandrealitiesofthestructuraleconomicchangeaheadofus.Ourobjectiveistogenerategreaterconversationanddebateonthebestmeansofachievingourglobalimperativeofbuildinganet-zeroeconomyby2050.Toꢀthisend,Deloittewelcomesyoutoengagewithusandeachother,aswehelpbuildanecosystemforaction,ontheleast-cost,optimalandequitablepathtoreachourcommonambitions.Criticaltothisreportisnotsomesimplisticarticulationofratesofreturn,butadetailedstudyinthefactorstohelpunlockfinanceinserviceofbuildingnewmarketswithnewrules,and,consequently,newrisksandstrategicoutlooks.Importantly,thisreportplacesfocusonalessrecognizedunderstandingofthistransition—thattheoptimalpathtonetzerorequiresustocollectivelymanagethedebtandequityaspectsofglobalinvestmentflowsinthistransitionupfront.Why?Becausetheenergytransitionrequiresdevelopingeconomiesasmuchas,ifnotmorethan,thedevelopedeconomies,forglobalgrowthconsistentwithnetzeroby2050.Andasthefinancecommunityknowswell,de-riskingprojects,ormakingthembankable,iskeyforbothdevelopedanddevelopingeconomies.Theessenceofajusttransitionsitsattheheartofthisreport.JenniferSteinmannGlobalSustainability&ClimatePracticeLeaderDeloitteGlobal03FinancingtheGreenEnergyTransition:AUS$50trillioncatch|TableofContentsForeword030506GlossaryExecutivesummary1.ꢀClimateneutralityisanunprecedentedfinancialchallenge1.1.ꢀLimitingglobalwarmingto1.5°C080909101.2.ꢀThestruggletofinancetheenergytransition1.3.ꢀObjective2.ꢀTowardaclimate-neutralworld2.1.ꢀAdynamicbutinsufficientpolicyenvironment2.2.ꢀKeytechnicalcharacteristicsofanet-zeroworld1213153.ꢀWhatisholdingbacksustainableinvestments?3.1.ꢀPoliticalbarriers202222233.2.ꢀMarketbarriers3.3.ꢀTransformationbarriers4.ꢀFosteringinvestmentsinthegreentransition4.1.ꢀAtoolkittofostersustainableinvestments4.2.ꢀFocusondevelopingeconomies242534364.3.ꢀInvestmentimplications5.ꢀAcallforaction38Appendices424243Appendix1.ꢀCalculationoflevelizedcostofelectricityandhydrogenAppendix2.ꢀDeloitte’sEnergyTransitionInvestmentCalculatorEndnotes45495051AuthorsGlobalcontactsDeloitteCenterforSustainableProgress04FinancingtheGreenEnergyTransition:AUS$50trillioncatch|GlossaryGlossar

yTermASEANBAUCAPEXCBIDefinitionTermDefinitionAssociationofSoutheastAsianNationsBusiness-as-usualIPPIndependentpowerproducerLevelizedcostofelectricity/hydrogenLow-incomecountriesLCOE/HLICsCapitalexpenditureClimateBondsInitiativeClimatestresstestMDBMICsNDCNZEMultilateraldevelopmentbankMiddle-incomecountriesNationallydeterminedcontributionNet-zeroemissionsCSTCCSCarboncaptureandstorageCarboncapture,utilizationandstorage(Carbon)ContractfordifferenceCarbondioxideCCUS(C)CfDCO2OrganizationforEconomicCo-operationandDevelopmentOECDOPEXPPAPVOperationalexpenditurePowerpurchaseagreementPhotovoltaicCOPDBSADFIConferencesofthePartiesDevelopmentBankofSouthernAfricaDevelopmentfinanceinstitutionDirectreductionofironElectricarcfurnaceR&DRoRUKResearchanddevelopmentRateofreturnDRIEAFUnitedKingdomECBEuropeanCentralBankUNUnitedNationsEIBEuropeanInvestmentBankUSUnitedStatesEmergingmarketsanddevelopingeconomiesEMDEsEPCESGEUEnergyperformancecertificateEnvironmental,socialandgovernanceEuropeanUnionEVElectricvehicleFiPFeed-inpremiumFiTFeed-intariffGBPGDPGHGICEGreenbondsprincipleGrossdomesticproductGreenhousegasInternalcombustionengineInternationalEnergyAgencyInternationalMonetaryFundIEAIMF05FinancingtheGreenEnergyTransition:AUS$50trillioncatch|ExecutivesummaryExecutivesummaryReachingnet-zerogreenhousegas(GHG)emissionsgloballyby2050requiresafundamentaltransformationofsocietyfromthecurrentfossilfuel-centricmodeltoahighlyrenewableandelectrifiedenergysystem.Thisꢀtransformationentailssignificantinvestments,ontheorderofUS$5trillion/yeartomorethanUS$7trillion/yearthrough2050.However,currently,lessthanUS$2trillionareinvestedeachyeartodrivethistransition.Ifinvestmentsdonotscaleuprapidly,theworldwillfailtomeetitsclimateobjectives.Developingeconomies,whereaboutthree-quartersofgreeninvestmentsshouldoccur,oftenfacegreaterrisksandstricterpublicbudgetconstraintsforenergytransitionprojects.Therefore,greenprojects,especiallywhentheyareintheGlobalSouth,areoftennotbankable,i.e.,theirrisk-returnprofilesdonotmeettheinvestors’criteriatomobilizesufficientcapital.Adirectresultofpoorinvestmentopportunitiesandrisk-returnprofilesforgreenprojectsisthelackofprivatemoneyfinancingtherequiredtransformation.Mostoftheidentifiedtechnologicalsolutionsforclimateneutrality(renewableenergy,electrification,greenhydrogen,etc.)arehighlycapital-intensiveandoftennewandimmaturewithsignificantdevelopmentuncertainties.Ahighlycapital-intensiveenergytransitionmeansthatthecostofcapitalisakeycostdriver.Thisreflectsanimmutablelawoffinance:theriskiertheprojectthehigherthecostofcapital.Infact,financingcosts,stemmingfromthecostofcapital,canaccountforasmuchashalfoftheinvestmentꢀexpenditure.Deloitte’sFinancingtheGreenEnergyTransitionprojectaimstoraiseawarenessoftheneedforgovernments,financialinstitutions,lendersandinvestorsandprojectdeveloperstojointlydevelopandagreeonmechanismstofosterbankability.Thecurrentpaper,asthefirstofitsseries,addressesthisbankabilitychallengeandassessesthefinancialinstrumentsthatcanfosterinvestmentsinthegreentransition,notablyindevelopingeconomies,focusingontheenergy-industrynexus,responsiblefor80%ofglobalgreenhousegas(GHG)emissions.Inwritingthisreport,Deloittecallsonitsreaderstoengageintheconversationonthefutureofgreenfinanceandontheresolutionofkeyinvestmentbarrierstoacceleratetheenergytransitiontoday.Greenprojectscurrentlysufferfromunderinvestmentandhighrequiredreturnratesbecauseprivateinvestorsseegreentechnologiesasriskierthanalternativeinvestments.Akeycontributortothisriskperceptionisthepoliticalandregulatoryrisksthatstemfromgovernments’failuretoestablishthenecessarymechanismsandinstrumentsthatcanguaranteeattractivereturnsoninvestment.Governmentsofcountriesacrossthefullspectrumofeconomicdevelopmentshouldworkwithfinancialinstitutionstodevelopmechanismsandinstrumentsthatcanreducerisksandunlockprivatefinanceatattractivecosts.Theserisksareassociatedwithpolitical,marketandtransformationbarriers.06FinancingtheGreenEnergyTransition:AUS$50trillioncatch|ExecutivesummaryThekeyactionleverstoovercomethemcanbegroupedinthreemaincategories:reducingtherisksofgreenprojects,bridgingthecostgapbetweenfossil-basedGHG-intensiveproductsandtheirgreencounterpartsandcuttingtheuseoffossilfuels.cumulatively).About70%ofthoseinvestmentswouldtakeplaceinlow-andmiddle-incomeeconomies.Reducingcapitalcostscanbothfacilitateprivatecapitalflowstowardthetransitionandreducetheircost.AchievingbankabilitycanunleashprivatefinanceandbringinvestmentspendingdownbyUS$2trillioneveryyear(US$50trillioncumulatively,abouthalfofglobalyearlyGDPtoday)intheperiodto2050.•Clearclimatepolicies,guaranteemechanisms,offtakereliabilityandthedevelopmentofdomesticcapitalmarketscansignificantlyreducetherisksassociatedwiththeseprojects.Notably,blendedfinancemechanismscanreducebothprojectrisksandfacilitatecommercialcapitalflowstogreenprojectsbyvirtueofthemobilizationpowerofconcessionalcapital.US$1ofconcessionalpublicfinancecanmobilizemorethanUS$4commercialcapital,morethanhalfofwhichcancomedirectlyfromprivatecapital.Achievingclimategoalsisaformidablechallenge.Decisiveandcoordinatedpolicysupport,andcollectiveactionfrominvestorsandpolicymakersareparamounttoguideinvestmentstowardgreenandsustainableprojects.•Governmentsshouldreducetherisksthatthreatenthebankabilityofgreeninvestments.Allunderlyingrisks,fromunreliableofftaketounstablemacroeconomics,raisefinancingcosts.De-riskingtheinvestmentlandscapecanhelpunlockthelow-costcapitalthatwillmakethecostlyandcapital-intensiveenergytransitionmoreaffordable.Overall,governmentswillbepivotalinmakingmoregreenprojectsꢀbankable.•R&Dandupfrontinvestmentsupportschemes,theadditionofoperatingpremiumstogreenassetsandthepenalizationofGHG-intensiveassetsaresomeofthekeytoolstobridgethecostgapbetweengreenandGHG-intensiveassets.Theyareoftenusedincombinationtofacilitatemarketintegrationofgreenproducts(e.g.,carbontaxandfeed-inpremiums).•Undercurrentfinancingconditions,reachingnetzeroby2050cancostmorethanUS$7trillion/year.Concessionalfinanceviainnovativefinancingstructurescanreducethecostofthetransitionbynearly40%fordevelopingcountries,loweringglobalinvestmentneedstoUS$5.5trillion/year.•Endingfossilsubsidies,compensatingfortheearlyphase-outofsomeofthefossilassetsandfacilitatingthejobtransitionofpeopleemployedinGHG-intensiveindustriestocleanonescanfacilitatethetransitionbothsociallyandeconomically,preparingthegroundworkforcuttingfossilassets.•Societiesandinvestorsshoulddealwithsignificantupfrontinvestmentstodayandreapthebenefitslater.Thecostofinactionishigherthantheburdenofasmooth,plannedtransitioninitiatedtoday.ThegreentransitioncanincreasetheworldeconomybyUS$43trillionbetween2021and2070.Requiredinvestmentlevelsremainbelow6%ofglobalGDPannually,whereasacurrentpolicypathway(alignedwith+3°Cofglobalwarming)wouldentailalmost8%ofglobalGDPlossby2070.Developingcountriesoftenfacehigherpoliticalandregulatory,offtaker,marketliquidity,currencyandinflationrisks.Theseareallfactorsimpactingprojects’financingcosts,makingcapital-intensiveenergytransitionprojectsdisproportionatelyexpensive.Whiledevelopingregionsgenerallyhavebetterrenewableendowments,highercostofcapitalentailshigherproductcostsintheseregions.Financingcostsaccountforaboutone-quarterofthelevelizedcostofelectricity(LCOE)fromsolarpowerplantsinadvancedeconomies,buttheyaccountforabouthalfofitindevelopingeconomies.Moreover,thegovernmentsofdevelopingcountriestendtorunontighterbudgets.Therefore,twokeyeffortschieflyaimedatemergingeconomieswillbetode-riskprojectstolowerthecostofcapital,andtoremovebarriersconstrictingtheflowofprivatecapitaltowardgreenprojects.•Investorsshouldchannelgreenfundstodevelopingeconomies.Currently,lessthanhalfofgreeninvestmentstakeplaceindevelopingcountries.ExcludingChina,whichaccountsforone-thirdofgreeninvestments,thatnumbershrinksto16%.Toreachclimategoals,some70%ofgreeninvestmentswouldneedtohappenintheGlobalSouthby2030.Thiscanonlybepossiblewithinternationalcooperationandtheactiveparticipationofdevelopmentfinanceinstitutionsandmultilateraldevelopmentbanks.Intheabsenceofconcessionalfinanceindevelopingeconomies,anet-zeroscenariowouldcostmorethanUS$7trillion/yearonaveragethrough2050(almostUS$200trillion07FinancingtheGreenEnergyTransition:AUS$50trillioncatch|1.ꢀClimateneutralityisanunprecedentedfinancialchallenge1.neutralityisanꢀCꢁ

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ꢁunprecedentedfinancial

ꢁchallenge08FinancingtheGreenEnergyTransition:AUS$50trillioncatch|1.ꢀClimateneutralityisanunprecedentedfinancialchallenge1.1.Limitingglobal1.2.ꢀTheꢀstruggleꢀtoꢀfinanceꢀwarmingto1.5°CtheenergytransitionAnthropogenicgreenhousegas(GHG)emissionslikecarbondioxide(CO),methaneandnitrousoxide(NO)haveBoththeInternationalEnergyAgency11andInternationalRenewableEnergyAgency12estimatethataboutUS$4trillion/yearofglobalinvestmentswillbeneededuntil2050toachievenet-zeroGHGemissionsandlimitglobalwarmingto1.5°C.ThisrequiresashiftfromthehistoricalvalueofUS$1.8trillion/yearin2019andcurrentpolicytrajectoryofUS$3.3trillion/year.1222causedmuchoftheobservedglobalwarmingoverthepast150ꢀyears.1Climatechangecausedbytheriseoftemperaturesovertheearth’ssurfaceseriouslythreatenstoendangerbiodiversity,makefreshwaterscarcer,andcausefrequentdevastatingeventssuchasdroughts,floodsandwildfires.2AccordingtoThus,despitestrongeffortsfromeachsideoftheeconomy,theworldhasbeenstrugglingtokeepupwiththeinvestmentneedsofthetransition.Financingtheenergytransitionhasprovenparticularlychallengingindevelopingcountries,whichfaceevenhigherinvestmenthurdlesthanadvancedeconomieswherethetransitionisalsoslow.10,13theIntergovernmentalPanelonClimateChange(IPCC),limitingglobalwarmingto1.5°Ccould“reducetheprobabilityofextremedrought,precipitationdeficits,andrisksassociatedwithwateravailabilityinsomeregions”.ThisrequiresveryrapidglobalGHGemissionreductionsandreachingclimateneutralitybynolaterthan2050.3Moreover,thedevelopingworldwillbemoreseverelyaffectedbyclimatechangethanadvancedeconomiesandwillalsobethehomeofmosthumansthroughoutthe21stcentury.14,15Thisiswhyfinancingthetransitionindevelopingregionsisarguablythecruxoftheglobalracetonetzero.Thesilverliningliesintheimmensenaturalresourceendowmentofthedevelopingworld,frompreciousrawmineralstomakebatteriestosunbakedplainswheresolarpanelsthrive.Withitsyoungandincreasinglyeducatedworkforce,thedevelopingworldhaswhatittakestoleverageitsnaturalresourcesforthetransition.Thequestionnowishowtoresolvethefundingdeadlock.Energyandindustrialactivitiesareresponsibleformorethan80%ofglobalGHGemissions.Therefore,theprofoundtransformationofbothenergysupplyandindustrialprocessesisanunavoidablesteponthepathtoclimateneutrality.Thekeydecarbonizationleversoftheseactivitiesconsistoflarge-scale4renewabledeployment,industrialprocessesandtransportsector),useofgreenhydrogeninhard-to-abatesectors(e.g.,steelmaking,e-fuelsforaviationandmaritimetransport)andenergyefficiencyimprovements.Moreover,carboncapture,utilization5electrificationofend-uses(buildings,6directandindirect76andstorage(CCUS)willberequiredtodecarbonizeindustrialactivitiesthatusefossilfuelsasfeedstock,andtoproducee-fuelsGovernments,andespeciallydevelopingcountries,cannotsingle-handedlyfundtherequiredinvestmentstogettonet-zeroGHGemissionsby2050.Theprivatesectormustbemobilized.Asmuchoftherequiredtransformationconsistsofhighlycapital-intensivetechnologicalchanges,projectdevelopers,especiallyindevelopingcountries,arelimitedbyfinancialconstraints.Indeed,fundingmaynotalwaysbereadilyavailableforgreentransitionprojects,particularlyinplaceswhereinvestmentsfacehigherrisksorfornewtechnologieswithoutaproventrackrecord.Consequently,unlockingabundantandaffordablefundingforthetransitionwillrequirepolicyandmarketactorstoworktogethertoovercomekeyinvestmentbarriers.formaritimeandaerialtransport.theenergy-industrynexusfromahighlyfossil-basedsystem(above80%ofprimaryenergyandfeedstocksupply)toanearly8Suchatransformationof9fossil-freeworldamountstoatruesocietal,cultural,economicandpoliticalrevolutionwhichwillrequireunprecedentedeffortsandꢀinvestments.1009FinancingtheGreenEnergyTransition:AUS$50trillioncatch|1.ꢀClimateneutralityisanunprecedentedfinancialchallenge1.3.ꢀObjectiveTheFinancingtheGreenEnergyTransition–AUS$50-trillioncatchstudyaimstounderstandthekeybottlenecksthathindertheinvestmentsrequiredtoreachnetzero.Toanswertothesequestions,Deloitte’sFinancingtheGreenEnergyTransitionstudyassesses:01.thestateofplayoffinancialfacilitatinginstrumentsandtheirregionalandtechnologicalspecificities,andTheprojectconsistsofanidentificationofthekeyfinancialfacilitatinginstrumentstohelpacceleratethetransition,amappingofthegapsregardingthepracticalimplementationofthesefacilitatinginstruments,atechnology-andgeography-differentiatedassessmentofthesefinancialinstrumentsbasedonmodeling,andastakeholderreturnonexperienceanddepictionofafutureprojectfinanceecosysteminserviceofsustainabilityandclimatetargets.Moreprecisely,theoverarchinggoalofthisprojectistofindandlistouttoolsforincreasingthebankabilityofgreenprojects,especiallyindevelopingcountries,tofacilitateprivatecapitalflowstowardtheenergytransitionbyansweringthefollowingquestions:02.theprojectfinanceenvironmentandsomeofitscomplexitiesandsuggestionofapracticalcomprehensivesustainablefinanceecosystem.Thefirststepisthereforetounderstandthestateofplayandtheexistingfinancialinstrumentsinserviceofclimate.Giventhattheenergy-industrynexusisthekeycontributortoglobalwarming(80%ofglobalanthropogenicGHGemissions),thisreportaimstocreatesuchknowledgeandintroduceregionalandtechnologicalconsiderationstothisanalysisofthestateofplayalongwithmissingpiecesofthegreenenergytransitionfinanceꢀpuzzle.•Whataretheexistingfinancialtoolstoincreasethebankabilityofsustainableprojectsandmakethemmoreattractivefromaninvestorperspective,andhoweffectivearethey?•Whatismissingfromtheexistingspectrumofsolutionsandwhyaretheinvestmentsnottakingplaceattherequiredscaleorꢀpace?•Howdoesagreenprojectfinancingenvironmentlookandhowdodifferentactorsinteractinsuchanenvironment?Whatarethepracticalandinstitutionalinefficienciesinfinancingsuchprojectsandhowcantheybeovercome?•Whatarethepotentialnewinnovativefinancialinstrumentstopromoteglobally,andwhataretheregion-specificrequirementsforhelpingtoacceleratethetransitiontowardnet-zero?•Whatcanpublicandinternationalorganizationsdoascatalyzersofprojectfinance?Whatcanpolicymakersdotohelpeasethetransitionandguideprivatefundstowardclimatetargets?10FinancingtheGreenEnergyTransition:AUS$50trillioncatch|1.ꢀClimateneutralityisanunprecedentedfinancialchallengeTheoverarchinggoalofthisprojectistofindandlistouttoolsforincreasingthebankabilityofgreenprojects,especiallyindevelopingcountries,tofacilitateprivatecapitalflowstowardtheenergytransition.11FinancingtheGreenEnergyTransition:AUS$50trillioncatch|2.ꢀTowardaclimate-neutralworld2.climate-neutralꢀꢁTowardꢁaꢁworld12FinancingtheGreenEnergyTransition:AUS$50trillioncatch|2.ꢀTowardaclimate-neutralworld2.1.ꢀAꢀdynamicꢀbutꢀinsufficientꢀpolicyꢀenvironmentTheyear2015markedaturningpointforglobalclimatepolicywith195partiessigningtheParisAgreementandtheUNadoptingits17SustainableDevelopmentGoals(SDGs).16However,thefollow-upontheselandmarkagreementshasbeendisparatearoundtheglobe,withsomecountriesdoublingongreenenergypoliciesandothersstagnatingsince.17Themeasureofthisprogressarethenationallydeterminedcontributions(NDCs),whichParisAgreementsignatoriesshouldupdateeveryfiveyears.consumption-basedmethodologyisshowingnow,sincemid-2000s,itisnotthemaindriverofthisdecouplinganymoreformostadvancedeconomiessuchastheUK,EuropeandNorthAmericancountries.26Cleanenergies,notablyrenewableenergies,havealreadymanagedtochangethestoryastheybecomeincreasinglyattractive.Notonlyaretheycatchingupwithfossilfuelsintermsofcosts,buttheyalsoofferagreaterdegreeofstrategicautonomy.Thisisespeciallyrelevantforcountriesthathavehistoricallybeenhithardbyfossilfuelsupplyꢀshocks.AsofOctober2023,177countrieshaveupdatedtheirNDCs.18Ofthose,107countriesrepresentingover80%ofglobalGHGemissionshaveoptedformoreambitiousemissionsreductiontargets.Theseincludehistoricalemitters(advancedeconomies)andpotentialfutureemitters(emergingcountries).AlthoughthereportingproceduresoftheParisAgreementaremandatoryforsignatories,theachievementofitsobjectivesisnot.19Hence,theParisAgreementiseffectivelynon-binding.ThisiswhyNDCs,aswellasbindingnet-zeroGHGemissiontargetsarekeytosecuringclimateobjectivesagainstthetidesofgrowthandcrises,particularlywhenfossilfuelsubsidiesbecomepoliticallyattractive.Forinstance,therecentenergypricecrisisforcedgovernmentstodeployvastsubsidyplans20toprotectconsumerswhoweretrapped21intheirdependencyonincreasinglyexpensivefossilꢀfuels.Globaltidesshiftinginfavorofclimateneutralitytransitionscanbemeasuredbytheprogressmadeonnationalnet-zerotargets.AsofAugust2023,93economies(92countriesandtheEU)havenet-zerotargets,including19inpledges,51inpolicydocumentsand22inlaw(Figure1).Advancedeconomies,LatinAmericaandAsia-Pacificnationsarelargelyleadingtheracetonet-zeroby2050.Bycontrast,emerginganddevelopingregions,particularlyAfrica,China,theMiddleEast,RussiaandSouthAsiashowweakerpledges,laterdeadlinesormissingtargets.Ifleftunchecked,theclimatefootprintoftheseboomingeconomiescouldescalate.Indiaforinstancetargetsnet-zeroemissionsby2070,bywhichpointitcouldhost16%oftheworld’spopulation27andbeclosetoovertakingtheUSeconomy.28Therefore,despiteconsiderablepoliticalprogress,morepledgesmustbemadetohelpsecuretheachievabilityofclimatetargets.Besidestemporarilyboostingfossilfuelsubsidies,theenergypricecrisishasalsoinducedaparadigmshift,placingenergysecurityandstrategicdependenciesatthetopofpolicymakers’agenda.22This,alongwithasharpriseinfossilfuelprices,hasreducedthegapineconomicattractivenessbetweenfossilfuelsandgreentechnologies.Beforetheenergycrisis,economicgrowthwaslargelyplannedaroundtheexpansionoffossilfuelconsumption.Thehistoricalrealityofdevelopedcountrieshavingbuilttheireconomiesonthebackoffossilfuelsmadeitparticularlychallengingtoaskdevelopingcountriesnotto.However,today,cleanenergiesareenteringthefrayasaviablealternativegrowthmodel.EvenifGHGemissionsandeconomicdevelopmentweredeeplycorrelatedinthepast,23somedevelopedeconomiesmanagedoverthepastfewdecadestodecoupletheireconomicgrowthandGHGemissions.24TheꢀmainreasonsforthisRisinggreentechnologiesandbigclimatepromisesprovidethebackdropfortheongoingconstructionofaglobalnetworkofclimatepoliciesandtransitions.Governmentsandcompaniesarereleasingstrategieswithtargets,pathwaysandinvestmentoutlines.Emissionspricingmeasuresarealsograduallybeingimplementedgloballytoincentivizetheswitchtocleanenergies.AccordingtotheWorldBank,suchmeasureswouldonlycoverabout23%ofglobalGHGemissionsin2023butarerampinguprapidly.29Indeed,totalrevenuesfromemissionpricingincreasedsixfoldfrom2016to2022,bothduetohigherCO2pricesandtoexpansionintonewjurisdictions.30Cleanenergystrategiesandsupportschemesarealsobeingshapedaroundtheglobe.Forinstance,therearenowaround60countrieswithnationalhydrogenstrategiesandroadmaps,upfromlessthanfivebefore2020.31TheUSInflationReductionAct’s(IRA)section45V32deployeduptoUS$100billioninmassivetaxcreditsforhydrogen,raisingthestakesglobally.33However,greensubsidiesofthisscalearestilllargelylackinginthepartsoftheworldwherechallengingeconomicandfinancingconditionsmakethemmostꢀimpactful.observationareadecrease