ABSTRACT

An energy transition that moves away from fossil fuels to renewable and incorporates energy efficiency will address the climate change challenge and limit green house gas (GHG) emissions without preventing economic development in underdeveloped countries. The challenge lies not in convincing consumers and investors that a transition to clean energy would have benefits, but in crafting a cost–benefit analysis that advocates for investment in clean energy. Goldman Sachs announced an initiative that November by expanding its target for clean energy financing and investments to $150 billion by 2025. These commitments are an important step toward financing the clean energy transition, as the problem of climate change has been difficult to tackle politically, making market-based solutions necessary. Finding $2.7 trillion in investment annually sounds like a daunting task, but the institutional investors through capital markets will account for a significant part of that investment. Institutional investors hold $76 trillion in assets.