Sectoral winners and losers from the energy transition

Climate change mitigation, adaptation, and regulatory reporting have become major priorities for policymakers and business leaders and will have significant and wide-ranging impacts across the spectrum of economic activity in the coming decades.

We find that an innovation-inducing Net Zero Transformation scenario would lead to a net gain of $3.7 trillion in real global GDP by 2050, with mining being the major loser, while manufacturing, construction, services and transport all gain among the major headline industries.

What you will learn:

• Our new Industry Climate Service (ICS) assesses the implications of climate change and associated mitigation policies at the industry level. We quantify the impacts of five climate scenarios on output, sales, and energy use trends across more than 100 sectors, helping businesses develop a greater understanding of the big picture risks and opportunities presented by climate change.
• The net zero scenarios, in particular, are highly asymmetric in terms of their predicted impacts on sectoral activity, highlighting the crucial importance of industry-level analysis in this field.
• Within manufacturing, we find that investment facing sectors—or sectors that sit in the supply chain of investment-facing sectors—benefit from the large increase in spending on wind turbines, transmission infrastructure, and other equipment needed to power the electrification transition. Key beneficiaries include mechanical engineering, basic metals, and non-metallic minerals.
• In the Net Zero Transformation scenario, which models a green investment shock that raises productivity and innovation, the basic metals sector experiences a 6% increase in global output, owing to the metals intensive nature of the transition. This is despite the sector being coal intensive and experiencing a large increase in energy costs in the initial phases of the transition.