Existing Economic Clusters Article by Michael Porter.
ECONOMY
of Carbon Zero
The Carbon Zero Cluster is based on the carbon zero economy which spans many established industries. Carbon zero products and services will increasingy be at the high growty, high profitability front end of industures.
| Key Industries in the Carbon Zero Economy | Annual Revenues by 2030 |
|---|---|
| Transportation | $2.3 to $2.7 trillion |
| Building | $1.3 to $1.8 trillion |
| Power | $1.0 to $1.5 trillion |
| Water | $1.1 to $1.2 trillion |
| Consumer | $850 billion to $1.5 trillion |
| Agriculture | $550 billion to $1.2 trillion |
| Fuels | $650 billion to $1.15 trillion |
| Hydrogen | $650 to $850 billion |
| Waste | $300 to $400 billion |
| Industrials | $250 to $300 billion |
| Carbon | $100 to $200 billion |
CARBON ZERO OUTSIZES GDPs
The carbon-zero economy is poised to surpass many global GDPs.
$12.3 TRILLION MARKET
By 2030, the carbon-zero economy will generate over $12 trillion annually.
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Massive Opportunity
The carbon-zero economy, projected to exceed $12 trillion by 2030, will dwarf even the largest national economies. New York must act now, driving innovation and sustainability to capture its share and ensure long-term growth.
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Industrial Growth
Spanning industries, the carbon-zero economy unlocks synergies across sectors like finance, insurance, and real estate. It fuels local businesses, creating a vibrant ecosystem that drives economic growth and innovation.
DEMAND DRIVERS
of the Carbon Zero Economy
Cities worldwide are tackling climate risks, opening a massive global market for carbon-zero solutions. From London to Lagos, Jakarta to Johannesburg, the need to mitigate climate impact, and adapt to it, is accelerating.
Existing economic clusters.
| Global economic losses: Climate disasters could cost $1.7 trillion by 2030. Source: Munich Re, 2022 |
| Property damage: Extreme weather results in $650 billion annual losses. Source: Aon, 2022 |
| Agricultural yields: Global yields could drop 10-20% by 2050, costing $2.5 trillion. Source: FAO, 2022 |
| U.S. infrastructure damage: Climate events could cause $700 billion in damage by 2050. Source: NAS, 2023 |
| Energy costs: Managing climate change could reach $5.4 trillion by 2050. Source: IEA, 2021 |
| Climate-related health issues: Could add $200 billion annually to global health costs by 2030. Source: WHO, 2022 |
| Climate-induced displacement: Could cost $20 billion annually by 2030. Source: IDMC, 2023 |
COST DRIVEN
The cost of inaction is escalating rapidly. Insurance companies see the cost-benefit of taking meaningful action to address the climate crisis through both mitigation and adaptation.
COST DRIVEN
The cost of inaction is escalating rapidly. Insurance companies see the cost-benefit of taking meaningful action to address the climate crisis through both mitigation and adaptation.
A third driver: inadequate government efforts. Governmental efforts to date have fallen short of what is needed. While governmental efforts need to be rolled out, new approaches with a differnet approach are also needed.
| Climate Policy Failures |
|---|
| Kyoto Protocol (1997) A historic treaty to reduce emissions but lacked enforcement mechanisms. The U.S. never ratified it, weakening its overall impact. |
| Green Climate Fund Established to support developing nations in combating climate change, but funding shortfalls have hampered its progress. |
| EU Emissions Trading System (ETS) An initiative to reduce emissions, but early issues like allowance oversupply weakened its effectiveness. |
| Carbon Offsetting Initiatives Criticized for lack of transparency and minimal real impact on emission reductions. |
| U.S. Clean Power Plan (2015) Aimed to cut power plant emissions, but faced legal challenges and was ultimately blocked. |
| Paris Agreement (2015) Set a global target to limit warming to 1.5°C, but most nations are falling short of their commitments. |
| UN Climate Conferences (COP) Regular climate summits, yet many, such as COP28, have faced criticism for lack of ambition and real action. |
A fourth driver: urban population growth. Rapid growth, especially in developing markets, magnifies both the challenges and opportunities generated by the climate crisis.
SURGING URBAN POPULATIONS
Driving demand for urban-oriented climate solutions is the fact that more and more people live in cities (Source: UN).
WORLD'S MAJOR CITIES, 2018
At present, many of the major cities are generally developed with infrastructure (Source: UN).
WORLD'S MAJOR CITIES, 2100
But by 2100 many mega-cities, especially in Africa and Asia, will exceed 50 million residents (Source: Ontario Tech).
Click graphic to enlarge
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Urban Population Growth
Urban populations are booming, with over half the world now living in cities. By 2050, nearly 70% will be urban dwellers, driven by economic growth and infrastructure needs. This brings pressure on housing and transport but unlocks new opportunities for sustainable urban development.
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Urban Populations in 2018
By 2018, 56% of the world’s population—4.4 billion people—lived in cities. Mega-cities like Tokyo, Delhi, and Shanghai surpassed 20 million residents. Cities in Africa and Asia are experiencing rapid growth, presenting both infrastructure challenges and sustainable planning opportunities.
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Urban Populations in 2100
By 2100, the urban population is expected to surpass 9 billion, with over 80% of people living in cities. Mega-cities in Africa and Asia could reach 50 million. This rapid urbanization will exacerbate challenges like housing shortages and climate-related risks, requiring resilient, sustainable solutions.
