The World Bank has announced that Artificial Intelligence could cut the capital costs of transitioning to a net-zero economy by up to $2 trillion. The statement was included in its latest report, “Net-Zero Industry Tracker 2024 Edition,” released Tuesday.
AI, especially generative AI, can boost capital efficiency by 5% to 7%, the report said, offering cost reductions for sectors like steel, cement, and heavy manufacturing, which are among the hardest to decarbonize. The bank estimated that $30 trillion in additional capital investment is needed by 2050 to meet global net-zero goals, but AI’s contributions could significantly reduce that figure.
“The potential of AI to reduce capital needs by $1.5 trillion to $2tn is a significant development for sectors that are crucial to the global economy but are also challenging to decarbonise,” the report said.
AI innovations, including better energy management, enhanced asset use, and faster research processes, were identified as key factors behind the savings. However, the report cautioned that AI’s adoption could lead to increased electricity demand, creating competition for low-carbon energy resources.
“The widespread adoption of AI technologies will likely place additional pressure on energy systems, creating a new challenge in balancing the power needs of the transition,” the report stated.
The bank called for stronger policy measures and international collaboration to ensure AI’s benefits outweigh its risks.
