The climate crisis and the Israeli economy: Challenges alongside opportunities

This Hebrew language report from McKinsey Israel explores the physical risks of climate change, the impact on the global economy to achieve net zero emissions, and the consequences of this transition on Israel in achieving a carbon neutral future.

Insights from the report include:

  • An acceleration of the warming trend in Israel is expected to result in temperature rising by about 1.5 °C up to the year 2100 under “best case” scenario forecasts by the Israel Meteorological Service, and up to about 4 °C under a "business as usual" scenario, adversely affecting the potential viable hours available for those who work outside.
  • If forecasts of significant sea level rises come true, this will undoubtedly result in damage to infrastructure and facilities that are near the coastline, impacting businesses and coast-based tourism.
  • Israel can be a global leader in climate technology, and the state’s natural solar potential signals that it can excel within the worldwide transition to renewable energy.
  • Israel will have to invest 35-100 billion Israeli new shekels ($10-29 billion ) over a decade in order to be on par, on average, with Western countries.

All of this raises questions around how this might affect the Israeli economy. What are the risks Israel faces? What role should Israel’s companies play? What are the opportunities that lie ahead for our public and private sectors? What are the opportunities in climate tech for Israel?

McKinsey Israel presents this new report as a contribution to the ongoing debate and to answer many of the questions posed above.