According to a new report, a net-zero world could generate $10.3 trillion by 2050

According to a new report, the green transition could result in significant economic gains as the world works to combat climate change.

According to a study conducted by Oxford Economics and Arup, green industries could add $10.3 trillion to the global economy — or 5.2% of global GDP — by 2050 under a net-zero scenario.

Under increasing pressure from costly climate-related weather events, governments and businesses may begin to see a rapid transition away from fossil fuels as a net positive as well as a way to avoid climate disruptions, according to the report.

According to the report, there are three reasons why a green transition could add significant value to the global economy. To begin with, the transition to clean energy will create new areas of competition. Second, green markets will sprout up. Third, if insufficient action is taken to combat climate change, the world could benefit from higher productivity.

Realizing that $10 trillion, however, necessitates governments enacting measures to encourage private-sector investment, such as research tax credits and co-financing. To achieve net zero, it is estimated that hundreds of trillions of dollars in public and private capital will need to be deployed.