By Dan Murtaugh
“Renewable power will become the largest area of spending in the energy industry in 2021, on our estimates, surpassing upstream oil and gas for the first time in history,” Goldman said in the note.
The divergence in borrowing costs for high- and low-carbon developments implies a carbon emissions price of about $40 to $80 a ton, Goldman said. In the real world, however, only about 16% of global emissions are priced, and the average value is about $3 a ton.
That’s creating a bifurcated investment model, with money flowing into mature technologies including wind, solar and biofuels while less-developed efforts such as like carbon capture and clean hydrogen could suffer without higher emissions prices, Goldman said.
“A two-speed de-carbonisation process may therefore accelerate de-carbonisation in the short term, but ultimately delay the long-term path towards net zero,” Goldman said in the note.