A new McKinsey report has taken an holistic view of the global transition to net-zero by 2050 across all sectors of the economy, with the consultancy predicting that it would mean a fundamental transformation of power, industry, mobility, buildings, agriculture, forestry and other land use, and waste.
An estimated annual spending on physical assets for a net-zero transition would also need to significantly exceed the US$3-4.5trn total spending estimates that previous analyses have produced.
McKinsey puts the price of transition at US$275trn globally by 2050 as low-emission activities are ramped up and high-emissions activities decrease at an average of US$9.2trn each year, an additional spending of US$3.5trn on today’s rate. That increase is the equivalent to half of global corporate profits in 2020, one-quarter of total tax revenue or 7 per cent of household spending in the same year, according to McKinsey.
Additionally, 200 million direct and indirect jobs will be added to the labour market by 2050, making up for the 185 million positions lost over the same period, the report finds, which assessed sectors that produce 85 per cent of overall emissions, with a detailed assessment of 69 countries.
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