Investment in the energy transition

Recent studies 1 show that, by 2050, the investments needed worldwide in the energy transition (production and storage of renewable electricity, decarbonisation of industry and transport, thermal renovation of buildings and housing, distribution of green electricity) will represent 4.2% of global GDP. This level of additional investment required is huge and, since the world’s potential GDP is initially given, it will require a considerable reduction in consumption. This raises several important questions: Where will the reduction in consumption come from (a spontaneous increase in private savings, an increase in the tax burden, a fall in wages)? Will the reduction in consumption be socially acceptable? Can we prevent it from affecting the lowest-income households? Is the production system able to move from producing consumer goods to producing the necessary equipment? 1 See for example Global energy transformation: A roadmap to 2050 , IRENA, 2019.