Reaching net-zero emissions will require an immense effort to invent, refine, and deploy climate technologies: those expressly intended to accelerate decarbonization. Research suggests, for example, that annual production of clean hydrogen, a low-carbon energy carrier, would need to increase more than sevenfold for the world to hit net zero in 2050. The global capacity of long-duration energy storage, which supports the use of renewable energy, must increase by a factor of 400 by 2040 to help the power sector achieve net zero by that year, according to one study.
Already, we see ten families of climate technologies as critical to meeting the net-zero challenge, and we expect others to emerge (exhibit). As demand for them swells, companies will have opportunities to create significant value while helping to curtail emissions. McKinsey analysis suggests that, in a scenario where the world reaches net zero by 2050, capital spending on equipment and infrastructure with relatively low emissions intensity would average $6.5 trillion a year—more than two-thirds of the $9.2 trillion in annual capital spending during that time. Our view is that almost all of those low-emissions assets would include climate technologies.