To meet the Paris Agreement a ‘massive redirection’ of spending from carbon-heavy investment into clean energy is required, according to a recently released report by classification society DNV.

Recognising key players in the energy transition, the organisation stated that financiers, bankers and governments have an essential role to play to achieve a 50% reduction in emissions by 2030.

At current rates, DNV forecasts that the budget for a 1.5C ‘future’ will be exhausted in 2029 with an emission reduction of only 9%.

Numerous challenges are being faced by financiers, policymakers and energy companies including pricing the risk of multi-decade energy projects and improving the profitability of clean-energy opportunities, according to DNV’s report, ’Financing the Energy Transition’.

The report also focuses on the opportunities presented by potential commitments to be made at COP26 in November.

Commenting on the need for Governments and businesses to use global carbon budget funds ‘very wisely’, Ditlev Engel, CEO, Energy systems at DNV, “The world is consuming the remaining carbon budget way too fast, and the chances for reaching the goals and objectives in the Paris agreement are now in real danger.”

A discussion revolving around these issues will take place at a one-hour DNV event to be held later this week. To be moderated by Engel, the event will combine DNV’s fifth Energy Transition Outlook (ETO) with views from energy and finance sector leaders.

The ETO revealed that DNV forecasts a halving of the world gross domestic product (GDP) that will be spent on energy from 3.2% in 2019 to 1.6% in 2050. It also stated that financing a Paris Agreement-compliant transition is possible providing the current energy expenditure fraction stayed the same.

Further conversation around the enabling of a ‘just and equitable’ transition will take place during the event.

Registration and details about the speakers involved can be found here.