Home News and Politics WORLD SHATTERED! Global Politics Plunged into Chaos as Climate Crisis Emerges as the Main Event

WORLD SHATTERED! Global Politics Plunged into Chaos as Climate Crisis Emerges as the Main Event

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WORLD SHATTERED! Global Politics Plunged into Chaos as Climate Crisis Emerges as the Main Event

Generation Investment Management’s 7th Annual Sustainability Trends Report Highlights Bold New Policy Commitments for Climate Action

LONDON and SAN FRANCISCO, Sept. 14, 2023 /PRNewswire/ — Generation Investment Management, the sustainable investment manager, has released its seventh Sustainability Trends Report. The report examines the progress made in transitioning to a low-emissions economy and outlines the major policy shifts that are transforming the global energy transition.

Al Gore, Chairman of Generation Investment Management, stated, “The political will to address the climate crisis has reached a tipping point. Countries like the United States, European Union, Australia, and Brazil have intensified their efforts to implement climate solutions. While significant progress has been made, we must continue to act urgently to avoid the worst impacts of the crisis.”

The report emphasizes that although emissions are still rising, the world is approaching a peak and subsequent decline in greenhouse gas emissions. This shift is primarily driven by the rapid growth of clean-energy technologies. Notably, the report points out that Russia’s attack on Ukraine and subsequent global energy crisis have also played a role in accelerating policy changes toward clean energy.

Paradox of Western Countries’ Decarbonization Efforts

Although Western countries are striving to speed up their energy transitions, they are simultaneously trying to replicate China’s existing supply chains. China leads in clean energy spending, nuclear power development, and industrial capacity. However, it is also building more coal-fired power plants, hindering global efforts to achieve emissions reduction targets.

The report raises questions about the extent to which Western countries will be able to decouple their economies from China and reshore clean energy manufacturing. The policy responses to this challenge will significantly impact the speed of the global energy transition.

The Reshoring of Clean Energy as a Political Necessity

In the United States, the Inflation Reduction Act (IRA) has had a significant impact on accelerating clean energy adoption. The policies of the IRA have led to increased investment and job creation in the clean energy sector, even in states that had previously resisted such policies. This showcases the potential of building broad coalitions in support of the clean-energy economy.

Key Trends Outlined in the Report

Power

  • Wind and solar power are now meeting 80% of new power demand globally. These renewable sources are projected to claim market share from fossil fuels in the coming years.
  • Interconnection queues, necessary for renewable power grid integration, are becoming increasingly challenging due to long waiting lists.

Transportation

  • Electric vehicle sales have increased by nearly 60% globally, with further growth expected this year. Electric two- and three-wheelers account for approximately half of all sales.
  • Shortages and rising prices of critical minerals needed for electric vehicle production, such as lithium, pose challenges.

Buildings

  • Heat pumps are gaining popularity for decarbonizing buildings, with sales rising in Germany and surpassing gas furnaces in the United States.
  • Improving energy efficiency in building shells remains a challenge, requiring new public policy.

Industry

  • Early-stage industrial decarbonization efforts, including the development of hydrogen projects, are starting to gain momentum.
  • Clean hydrogen could play a significant role in decarbonizing industries such as chemicals, steel, aviation, and shipping, but scaling up production and reducing costs are critical.

Land & Food

  • New commitments to protect forests and the ocean, including a global agreement on biodiversity, are positive developments.
  • Concerns have been raised about the credibility of carbon offsetting, highlighting the need for improvements.

Financing the Transition

  • The International Energy Agency estimates that mobilizing around $5 trillion per year by the 2030s will be necessary for global decarbonization.
  • Efforts are underway to secure financing for new energy infrastructure in developing countries, but a more ambitious global plan is needed.
  • The investment industry must play a leading role in allocating capital to support a low-emissions economy.

For media inquiries, please contact Richard Campbell at [email protected] or +44 (0)7775 784 933.

About Generation Investment Management

Generation Investment Management LLP is an independent, long-term investment firm focused on sustainability and client alignment. With headquarters in London and a presence in San Francisco, the firm oversees assets under management and supervision totaling over $44 billion1. For further information, visit https://www.generationim.com/.

SOURCE Generation Investment Management

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