US $ 37 trillion needed to finance transition over 2024 – 2030

The cost of climate inaction is substantial . Lower- and lowermiddle-income countries face up to 12 % of GDP being at risk of physical hazard losses by 2050 under a slow transition scenario and absent adaptation . Meanwhile , the challenge of energy security , affordability and sustainability looks very different in developing economies than in Europe and the US , where per capita incomes are as much as 40 times higher . Concurrently , IT advances are continuing apace , e . g ., Generative AI , requiring governments and corporates to make further investment . On the societal front , many countries are facing an increasingly aging population , which could stymie further economic growth . There is a cost in caring for such aging populations .

Besides the baseline scenario described above , we have developed a supplemental ‘ cost of transition ’ scenario that assumes additional debt ( over the baseline ) is raised to fund climate mitigation and adaptation , digital transformation and an aging population . We have not compared results with other development pathways that countries might take , which could be more costly than this transition scenario ( e . g ., failure to act on climate change ).

Climate financing takes up the largest share of debt for transition . We estimate that a cumulative US $ 37 trillion of debt – US $ 25 trillion for climate , US $ 7 trillion for

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