J.P. Morgan: A rapid expansion in renewable capacity will be key to reaching net zero

J.P. Morgan: A rapid expansion in renewable capacity will be key to reaching net zero

Energy Transition
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Net zero commitments are hitting the headlines, following President Biden’s recent pledge to cut US greenhouse gas (GHG) emissions in half by 2030.

In total, 58 countries, representing 54% of global GHG emissions, have now communicated a net zero target, and we expect further announcements ahead of the COP26 summit in November. The ambition to achieve net zero by 2050 is welcome; the implementation is a daunting task that will require major breakthroughs in climate technology. With 73% of global emissions stemming from the energy sector, overhauling the global energy mix will be a key piece of the puzzle. Our latest publication “Achieving net zero: The path to a carbon-neutral world” digs into the investment implications across sectors. A thorough understanding of how the wave of policy changes ahead will impact cash flows and valuations should be an essential part of any investment decision today.

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Source: BP Energy Outlook 2020, J.P. Morgan Asset Management. Forecast is based on BP’s scenario for global net-zero emissions by 2050. Data as of 31 March 2021.