An investor guide to negative emission technologies and the importance of land use

 

An investor guide to negative emission technologies and the importance of land use (Vivid Economics and Principles for Responsible Investment, October 2020, 47p)

Net Zero commitments and the Paris Climate Accords may well be driving a massive shift Negative Emission Technologies (NETs), which are surveyed here with the intention of highlighting the private sector and investor opportunities. It explores the risks associated with NETs, and assesses upside opportunities, particularly in forestry.

Examples:

  • Forest-related and other forms of Nature-Based Solutions (NBS) could generate US$800 billion in annual revenues by 2050, which translates into US$1.2 trillion today in Net Present Value terms, i.e,. more than the current market capitalization of the oil & gas majors
  • Natural forest restoration annual revenues could reach US$190 billion by 2050
  • Avoided deforestation may generate annual revenues with US$610 billion by 2050
  • Technical solutions, such as Direct Air Carbon Capture, Use and Storage (DACCS) and bioenergy with CCS (BECCS), could generate an additional annual revenue of US$625 billion by 2050

Big oil and Big tech have already made major NBS investments to achieve new net-zero targets. By 2050, the value of the global voluntary offset market could reach US$200 billion.

A map using only the logos of the corporations that have been making these investments is included, along with location information. Many tables and other details expand this overview.

Chapters include:

  1. Investor risks and opportunities associated with NETs
  2. The Inevitable Policy Response (IPR) and the Forecast Policy Scenario (FPS)
  3. Companies are committing to net zero and realise the need for NETs to decarbonise their value chains
  4. Many climate scenarios rely largely on BECCS, but it is unlikely to deliver projected negative emissions
  5. A portfolio of NETs with immediate forestry action is required to limit global warming at 1.5–2oC
  6. Companies and investors have already started to invest in forest-related NBS projects
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