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Super cycling to a sustainable future

Super cycling to a sustainable future

But just what that cycle will look like is, of course, impossible to predict. Just consider how few people understood the impact of the internal…

Tuesday, Apr 26

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But just what that cycle will look like is, of course, impossible to predict. Just consider how few people understood the impact of the internal combustion engine on the horse and cart or the personal computer on our social networks.

“This cycle will be rich in carrots but it’s also not short of sticks, from both regulators and the providers of capital to investors and banks.”

There’s been plenty of guesses at the scale of the super-cycle however, some more rigorous than others.

According to McKinsey & Co “this wholesale shift toward institutions and projects that emit minimal greenhouse gases (GHGs) may create the largest reallocation of capital in history”.

The consultancy estimates nearly two thirds of annual, global capital spending currently goes into high-emissions assets but if the world is to reach net zero carbon emissions by 2050, this pattern would reverse with more than two thirds of capital outlays instead spent on low-emissions assets.

That would translate to $US9.2 trillion in annual average spending on physical assets – $US3.5 trillion more than today – and equivalent to half of global corporate profits and one-quarter of total tax revenue in 2020, according to McKinsey. Carrots and sticks

At this bank, chief executive Shayne Elliott has spoken of the super cycle as one of the key growth opportunities, particularly for its institutional business, highlight the electrification of transport, the commercialisation of hydrogen and the financing of energy efficient buildings among a multitude of sectors.This cycle will be rich in carrots but […]

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