Achieving net-zero emissions by 2050 would entail a fundamental transformation of the global economy. To bring about these changes, nine key requirements encompassing the three categories of physical building blocks would need to be fulfilled against the backdrop of many economic and political challenges.
Start from December 2021, more than 70 countries accounting for more than 80 percent of global CO2 emissions and about 90 percent of global GDP have put net-zero commitments in place, as have more than 5,000 companies, as part of the United Nations’ Race to Zero campaign.1 Yet even if all the existing commitments and national climate pledges were fulfilled, estimates suggest that warming would exceed 1.5°C above preindustrial levels, increasing the odds of initiating the most catastrophic impacts of climate change, including biotic feedback loops.2 Moreover, most of these commitments have yet to be supported by detailed plans or executed. Nor will execution be trivial, as it would require a careful balancing of shorter- and longer-term risks.
Today, while the imperative to reach net-zero is increasingly recognized, the net-zero equation is not solved. This state of affairs should not be surprising, given the scale of the task at hand. Achieving net-zero emissions by 2050 would entail a fundamental transformation of the global economy. To bring about these changes, nine key requirements encompassing the three categories of physical building blocks, economic and societal adjustments, and governance, institutions, and commitment would need to be fulfilled against the backdrop of many economic (for example, inflation) and political challenges (for example, polarization within and among countries).
In this report, we focus on the second category, namely, understanding the nature and extent of the economic and societal adjustments. We simulate the global shifts in demand, capital allocation, costs, and jobs that would take place between now and 2050 in the context of a net-zero transition, examining potential gains and opportunities as well as losses and costs. Our analysis covers the energy and land-use systems that produce about 85 percent of overall emissions and takes a closer look at how the transition might affect 69 countries.
