What are the potential challenges in conducting a cost-benefit analysis for climate investments?

Conducting a cost-benefit analysis for climate investments can be challenging due to several reasons. Firstly, it's difficult to quantify the benefits of climate investments as they are often long-term and indirect. Secondly, there's uncertainty in predicting future climate scenarios and the effectiveness of mitigation strategies. Thirdly, there's a lack of standardized methodologies for calculating costs and benefits. Lastly, the analysis may not account for non-economic factors such as social and environmental impacts.

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Over 110 countries that account for over 70% of world GDP and carbon emissions have net-zero targets by 2050. Unless all emissions are limited to 400 gigatons, the temperature on earth could rise above the 1.5 degrees Celcius tipping point within a decade. To meet these goals, the IEA has projected that a total of $5 trillion annually must be spent in energy investments for a total of $35 trillion by 2030. With so much money on the line, how can each government figure out how much they need to invest to reach their country's pledge? The answer is a cost-benefit analysis.

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Product Management Toolkit (Part 2)

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