What is the path to net zero infrastructure?

Creating net zero pathways

Having clear and actionable data would be a huge step forward, but that data must also be acted upon to develop net zero pathways for infrastructure. This will be a key step to provide confidence that assets will not end up stranded. Take energy, for example. As recently as May 2021, when the IEA revealed its recommendations for the energy sector to reach net zero by 2050, some investors and policy makers were surprised to learn that no more gas projects should be developed. Gas, previously embraced for being greener than coal, turned out to be “not green enough” and likely to be problematic in the near future. 

The fact that even the energy sector lacks clarity, with its relative transparency and comparatively more available data, is telling. If governments are unclear about what projects are green enough to achieve climate goals, investors will either override net zero targets or look to other asset classes. The gas “shock” is a strong warning for infrastructure and endorses the need for better data to guide decision-makers as early as possible. Investors eager to enter the space could also help push the sector to reach net zero by asking, is this green enough?

Infrastructure assets have historically been attractive to investors for certainty and stability. With better data and a coordinated approach to net zero between the public and private sector, this should be feasible once more. 

The risks and opportunities related to climate change are too important for promises to remain vague or uncertain. Defining the path ahead depends upon actionable data. Without this, the road to net zero by 2050 will be near impossible to map.

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