Growing a cleaner world

Can planting billions of trees in Ethiopia help decarbonize the planet?

Questions you can ask your UBS Financial Advisor

  • How can planting trees contribute to decarburization?
  • What other ways can we decarbonize the world?
  • How can sustainable investments help save the planet?

Officials in Ethiopia say roughly 350 million trees were planted throughout the African country in one day at the end of July as part of the government’s Green Legacy plan that aims to plant 4 billion trees this summer.

Only about 4% of the land in Ethiopia is covered in trees today, compared to 100 years ago when over a third of the country was forested.

Dr. Dan Ridley-Ellis, the head of the center for wood science and technology at Edinburgh Napier University, told the Guardian newspaper that “Trees not only help mitigate climate change by absorbing the carbon dioxide in the air, but they also have huge benefits in combating desertification and land degradation, particularly in arid countries. They also provide food, shelter, fuel, fodder, medicine, materials and protection of the water supply."

Air quality is degrading due to the ever-increasing concentration of greenhouse gases and particulates such as CO2, methane (CH4), nitrous oxide (N2O) and ozone (O3) in the atmosphere. This situation is exacerbated by the growing trend of urbanization and the greater energy consumption that results from it, especially in developing countries.

As well as reforestation, the Chief Investment Office (CIO) notes several ways to decarbonize the world.

Three focus areas are power generation, transportation, and energy efficiency. With stricter and harmonizing standards, the usage of clean-air technologies should accelerate and investment should increase strongly, given the commitment by a number of large countries to reduce emissions.

According to the Chief Investment Office, "the need to improve air quality presents an investment opportunity for years to come."

Whilst clean air is a basic human need, improving air quality has taken on the urgency of a global emergency, given the increasing level of carbon in the air.

"The clean-air market is not well-defined, but we can assess its size based on IEA calculations and estimated investments needed by 2030," according to CIO.

"Extrapolating from the USD 1.6tr spent in 2014, annual investment in clean-air products and services is forecast to rise gradually to USD 2tr by 2020 and USD 2.5tr by 2030 under the UN's Intended Nationally Determined Contributions (INDC) scenario, which is also our base case scenario. This increase corresponds to 3–4% annual growth."

The Chief Investment Office sees the greatest potential in:

  • Renewable energy technologies (such as solar PV and wind) as well as the needed infrastructure (electricity transmission and distribution, energy storage);
  • New technologies for the powertrain of the future in automobiles, including electric vehicles and hybrids; and
  • Energy efficiency measures in buildings, industrial applications, and power networks.

"As cost-effective new technologies are developed and efficiencies are realized, this theme should benefit from continued opportunities," CIO concludes.

For more, see the Longer-term investment white paper, Clean air and carbon reduction (PDF, 615 KB), 18 May 2018.

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