Achieving global net-zero emissions targets by 2050 may cost the gold industry up to $70bn (£54.3bn) over the next decade, according to a new paper by the World Gold Council.
However, the analysis found that “it is feasible and cost-effective for the gold industry to reduce emissions by up to 95 per cent over the time-scale required.”
The report showed that gold production accounts for an overwhelming percentage of the metal’s emissions profile, whilst downstream applications in jewellery, bullion and electrical products barely add at all.
The paper identified a number of methods that the industry can use to decarbonise production, including replacing traditional energy sources with renewables, using carbon-friendly methods of storage like lithium batteries, and switching transport operations to electric vehicles.
As more and more investors look to divest from carbon-heavy assets, the research also highlights gold’s potency can play as an alternative investment.
Due in part to its status as a luxury good and monetary asset, gold is remarkably robust as a store of value even under extreme market conditions.
Terry Heymann, chief financial officer at the World Gold Council, commented: “This new research demonstrates that gold has an important role to play in supporting the transition to a lower-carbon economy, both through decarbonisation efforts and as a compelling investment as investors look for resilient assets in their portfolios.”
Dr Ben Caldecott, director of the Oxford Sustainable Finance Programme and an associate professor at the University of Oxford, said: “The global challenge of transitioning to a negative carbon footprint poses a massive challenge but also opportunity and will reshape the value of assets and companies across the global economy.
“Gold can be a part of the solution, but there is much more to do. I welcome this report and look forward to seeing the gold industry’s progress over the coming years.”