FOR PUBLIC DISTRIBUTION IN THE U.S., CANADA, LATIN AMERICA, HONGKONG, SINGAPORE AND AUSTRALIA. FOR INSTITUTIONAL, PROFESSIONAL, QUALIFIED INVESTORS AND QUALIFIED CLIENTS IN OTHER PERMITTED COUNTRIES. Policy helping accelerate the transition Regime drivers Total annual green investment, past and planned, 2015-2030 2.5 Faster transition 2 no We track the transition to net-zero We see it cutting clean technology lli carbon emissions likewe track any costs and spurring domestic r tri1.5 other driver of investment risks and manufacturing. lla opportunities, such as monetary We see opportunities in transition- do policy. We take a view on how it is S. 1 likely to play out, not how it should ready investments. Infrastructure is U. play out. We assess its implications one way to play into that. See page for financial risks and returns. 13. Yet the transition is set to add to 0.5 production constraints, in our view. Our researchsuggests the global It involves a huge reallocation of transition could accelerate, resources. Oil and gas will still be 0 boosted by significant climate neededto meet future energy 2015 2016 2017 2018 2019 2020 2021 2030 policy action, by technological demand under any plausible progress reducing the cost of transition. If high-carbon production Developed economies China Emerging economies renewable energy and by shifting falls faster than low-carbon societal preferences as physical alternatives are phased in, shortages Chart takeaway: Global investment in the net-zero transition is damage from climate change –and could result, driving up prices and set to step up notably in coming years – largely thanks to key its costs – become more evident. disrupting economic activity. The policy action. Europe has intensified its efforts to faster the transition, the more out of build clean energy infrastructure as sync the handoff could be – it seeks to wean itself off Russian meaning more volatile inflation and Source: BlackRock Investment Institute and International Energy Agency (IEA), November 2022. Notes: The energy. The clearest example of economic activity. chart shows IEA estimates of past and planned annual green investment, in trillions of U.S. dollars. Forward- looking estimates may not come to pass. that is the European Commission’s RePowerEUPlan. Further impetus is likely to come from higher We find good opportunities by traditional energy prices, which are getting ahead of where the We track the transition to net-zero exacerbatingthe cost-of-living green investments are going.” carbon emissions as we track any other crisis and have shifted the driver of investment risks and economics decisively in favor of cleaner energy sources. In the U.S., Hannah Johnson opportunities. the Inflation Reduction Act is Portfolio Manager, Natural poised to unleash enormous Resources, BlackRock investment. Fundamental Equity 12 2023 outlook 12 12 2022 midyear outlook BBIIIIMM1122U/M1222U/M--26121472617935--1212/16/16