May 24th, 2024

High interest rates threaten rollout of green economy: Wood Mackenzie report

By The Canadian Press on April 18, 2024.

A new report says if high interest rates persist, it will be harder and more costly for society to transition to a net-zero economy. A wind turbine is shown at a wind farm near Pincher Creek, Alta., Wednesday, March 9, 2016.THE CANADIAN PRESS/Jeff McIntosh

CALGARY – A new report says if high interest rates persist, it will be harder and more costly for society to transition to a net-zero economy.

The report by global consultancy Wood Mackenzie says high interest rates are putting disproportionate pressure on renewable energy developers as well as on emerging technologies like carbon capture and storage and hydrogen.

The new and developing industries will require significant capital investments that will be more expensive because of the high cost of borrowing.

Wood Mackenzie says by comparison, more established industries such as oil and gas are relatively unaffected by higher interest rates.

The report says governments need to offset the burden of high interest rates by offering clear, consistent and sustained incentives to support the uptake of low-carbon energy and green technologies.

Wood Mackenzie has estimated that US$75 trillion in investment will be required if the world is to reach net-zero greenhouse gas emissions by 2050.

This report by The Canadian Press was first published April 18, 2024.

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