Finance, technology, and policy for green investment By harnessing the power of policy, technology, and finance, we can unlock the potential of green investment and quicken the transition to a low-carbon economy
Valentina Dedi KBR
T he global community finds itself at a pivotal moment in the battle against climate change. As the urgency to transition from a fossil fuel-dominated energy system, heavily reliant on oil and gas, to one driven by greener sources intensifies, governments and investors alike are managing the challenges and opportunities presented by this shift. This article explores how the right mix of supportive policies, financial mechanisms, and technological innovation can de-risk investments in carbon capture, utilisation and storage (CCUS) and maximise the potential for green investment amid uncertain times while also addressing the role of the oil and gas industry in the transition. Governments around the world have acknowledged the urgency of accelerating the energy transition and have prioritised capital allocation in their national energy policies. The Paris Agreement sets ambitious targets for reducing greenhouse gas emissions with the goal of limiting global temperature rise to well below 2°C above pre-industrial levels. Meeting these targets requires an unprecedented level of investment in clean energy technologies and infrastructure. S&P Global Platts estimates it will require more than $5 trillion in investment each year from now through to 2050 to meet the targets agreed by the world’s major economies under the Paris Agreement by 2050 ( S&P Global, 2023 ). To put this into perspective, this is equivalent to investing the entire economy of Germany today, every year for the next two and a half decades. This scale of investment is well beyond what government budgets can afford
alone. Large-scale private sector engagement will be critical, too, including from the oil and gas industry. In recent years, significant capital has been directed towards energy transition projects. However, these investments have been largely constrained to commercially viable projects, primarily favouring renewable power generation, such as wind and solar. These technologies have matured and are now market-ready thanks to a continuous decline in technology costs and the advances in efficiency over the past decade. While they are crucial to the energy transition, they alone cannot address
Industry is facing an urgency to accelerate the energy transition
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