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Home > Databases > Library > An Investor Guide to Negative Emission Technologies and the Importance of Land Use

An Investor Guide to Negative Emission Technologies and the Importance of Land Use

October 2020
Source: 
Principles for Responsible Investment (PRI)
An Investor Guide to Negative Emission Technologies and the Importance of Land Use_PRI.jpg

The report analyses the growth in corporate climate commitments and probes some of the key assumptions in major climate scenarios to uncover opportunities for investors – particularly in forest related nature-based solutions – while also highlighting the risks and uncertainties associated with some negative emissions technologies. It finds:

  • Negative Emission Technologies (NETs) are the next investment frontier and offer trillion-dollar upside opportunities for investors.
  • Within NETs, Nature-based solutions (NBS) to the climate crisis focused on reforestation and afforestation are the most viable near term opportunity and could generate US$800 billion in annual revenues by 2050 with assets valued well over US$1.2 trillion, surpassing the current market capitalisation of the oil & gas majors.
  • Investments in avoided deforestation will present additional opportunity as measuring, reporting and verification (MRV) mechanisms and compensation schemes reach scale. However, reputational risks may dampen investor enthusiasm unless forest laws are vigorously enforced or tightened to end deforestation.
  • Technical solutions, such as Direct Air Carbon Capture, Use and Storage (DACCS) and bioenergy with CCS (BECCS), are ones to watch longer term and could generate an additional annual revenue of US$625 billion by 2050.

 

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Sectors: 
Forestry
Themes: 
Natural Capital, Climate Change
Key search terms: 
improving land use

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