This pertains not only to energy prices per se but also to commodity markets, including raw materials such as graphite or cobalt that are important for the energy transition as well. Both aspects increase economic pressure on companies, governments and consumers, and they also complicate the global climate effort. The future of a rule-based international system appears threatened and commodity prices are skyrocketing.

The war in Ukraine has changed the geopolitical landscape fundamentally. However, by 2050, it is estimated that an additional USD 33 trillion on top of existing spending plans (USD 98 trillion) is needed to achieve the 1.5☌ goal. While the existing spending plans seem highly ambitious, additional investments are needed to stay in-line with 1.5☌ of global warming target. Accordingly, between 2005 to 2020, global investment in low-carbon technology increased from USD 60 billion to USD 524 billion. As to the very large investments required to accelerate the green transition, increasing foreign direct investments and other capital trends create a favourable situation. While the use of coal is declining, this is partly offset by increasing gas consumption.

Further technology innovation is to be expected in low-carbon hydrogen and digitalization. At the same time, technology has advanced considerably, reducing energy generation costs dramatically (solar, onshore and offshore wind) as well as the cost of battery storage. 1 Many countries have implemented policies that promote electricity generation from renewable energy, as well as transport and heating related renewable energy policies. 125 countries worldwide have set the goal of climate neutrality by 2050 or before, which also is the climate-neutrality target of the EU, in line with IPCC conclusions. The fundamental technical and political conditions for achieving the goals are in place. Existing climate policies may not be sufficient yet, but they already contain many important pledges and measures.

New world order