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Illustration: Aïda Amer/Axios

A successful global effort to slash carbon emissions demands huge investments to finance the unprecedented transformation of energy systems and related infrastructure — and it's a capital shift that's already well underway.

Why it matters: Private investment is already ramping up, and President Biden wants to spend hundreds of billions of dollars. Independent experts say the spending that will be needed to achieve net-zero carbon emissions by 2050 — a goal now embraced by the U.S. and many other countries — would be on the scale of the Industrial Revolution.

  • That's a goal the administration happily embraces. “We believe very deeply that this is going to be the biggest economic transformation since the Industrial Revolution," said John Kerry, Biden's special envoy on climate change, during an event on Wednesday.

A few snapshots:

  • In 2020, the research firm BloombergNEF estimates that worldwide investment in renewables, electric vehicles and other tech under the overall "energy transition investment" umbrella already topped $500 billion.
  • Now, Biden is calling for a huge increase in his infrastructure package. ClearView Energy Partners estimates that the "energy relevant" portions of the package could cost as much as $584 billion in the coming years. (And the White House has said its summary doesn't count the costs of the plan's new and expanded tax credits for clean energy.)
  • The private sector is already making huge investments of its own. For instance, General Motors is investing $27 billion through 2025 on development of electric vehicles and autonomous tech.
  • Oil giants like BP and Shell are moving to diversify too, even as fossil fuels remain their dominant business lines now.

What they're saying: "The fact that there is out there, globally, a $23 trillion market for clean energy products, for products that will reduce will reduce greenhouse gas emissions, is a massive opportunity for this country," Energy Secretary Jennifer Granholm said Thursday.

  • The figure Granholm cited is an estimate from the International Finance Corporation, part of the World Bank Group, of a catch-all category (not just energy) of various "climate-smart investments" in emerging markets.
  • "Other countries are seeing that opportunity as well, and our economic competitors are working to corner the market on those opportunities," she added, citing China.

The big picture: Avoiding the worst dangers of climate change will not be cheap. It means rapidly decarbonizing power, mobility, industrial processes and more — enough to cut emissions sharply this decade en route to net zero emissions by 2050.

  • Investments to date, while growing, have not begun putting the world on a path toward steep emissions cuts needed to meet the goals of the Paris Agreement.

What we're watching: The corporate winners and losers in this reshaping of global energy.

  • Many of the world's largest companies, acting on a mix of opportunity and pressure to address climate, are shifting their investment strategies.
  • But there's no guarantee that these huge incumbent players will successfully navigate the long-term shift to a lower carbon system.
  • Big Oil is competing with existing electricity giants in their renewables efforts, while legacy automakers are facing off against a suite of startup EV makers.

Go deeper

Ben Geman, author of Generate
Apr 8, 2021 - Economy & Business

The link between economic growth and CO2 emissions is weakening

Expand chart
Data: The Breakthrough Institute; Chart: Sara Wise/Axios

An analysis finds "increasing evidence" of a fraying connection between economic growth and higher carbon emissions — a needed first step toward steep CO2 cuts.

Driving the news: The Breakthrough Institute's Zeke Hausfather finds that since 2005, emissions have become "decoupled" from GDP growth in 32 nations with a population of at least 1 million people.

Ben Geman, author of Generate
Apr 8, 2021 - Energy & Environment

The emerging frontiers of climate activism

Illustration: Sarah Grillo/Axios

The new(ish) group Law Students for Climate Accountability just launched a pressure campaign against the heavyweight law firm Gibson Dunn over its work for oil industry clients.

Why it matters: It's just one of many examples of how climate activism has been tactically evolving in recent months and years. That includes taking aim at a wider suite of corporate targets, like PR agencies and big tech, and intensifying a years-long focus on the finance sector.

Ben Geman, author of Generate
Apr 8, 2021 - Politics & Policy

Treasury puts a number on its fossil tax plan

Illustration: Sarah Grillo/Axios

The Treasury Department estimates its plan to end subsidies for fossil fuel companies would bring in over $35 billion in federal revenue over 10 years.

Driving the news: "The main impact would be on oil and gas company profits. Research suggests little impact on gasoline or energy prices for U.S. consumers and little impact on our energy security," officials said in a report on the wider White House tax policy proposal.