ZURICH (Reuters) - Switzerland only needs to invest 2% of its gross domestic product annually over the next three decades to become carbon neutral by 2050, a banking study published on Thursday found. Bringing Switzerland to net zero emissions by 2050 will require an average 12.9 billion Swiss francs in annual investments, the Swiss Bankers Association (SBA) and the Boston Consulting Group concluded. This could largely be financed through banks’ existing lending as well as smaller government outlays into infrastructure, they said. The report marks the first industry effort to assign a value to Switzerland’s green transition, estimated at 387.2 billion francs ($422 billion) in total investments through 2050. BCG Managing Director Christian Schmid said the required spending would equate to roughly double Switzerland’s current military outlays. “The Swiss economy is certainly in a position to afford this,” he told a news conference. Switzerland has an advantage over its peers due to a landscape that has allowed for an early switch to renewable electricity, primarily hydropowered. Its energy sector contributes just 7% to Switzerland’s CO2 emissions compared to 26% Europe-wide and a similar percentage globally. It also boasts a well-laid network of public transport and an economy focused primarily on the service sector, in which more fossil fuel-intensive activities such as machine-making, chemicals and cement play a much smaller role. However, its wealth has contributed to drivers buying disproportionately more gas-guzzling SUVs, while oil-fired heating in the building sector is the highest in Europe, the study said. BANKS’ ROLE “Banks... are part of the solution,” SBA Deputy Chief Executive August Benz told the same news conference, adding they needed the cooperation of businesses, consumers and politicians. The study said banks could cover 83% of the financing needs through 10.7 billions francs in lending, representing about a tenth of mortgages and corporate loans they make in the country, while a further 1 billion francs a year is to be raised on capital markets. The roadmap proposes front-loading investments within the next two decades based on existing technologies, such as expanding public transport and increasing the number of electric vehicles and charging stations. Later investments relate to technologies still in early development, such as large-scale carbon capture utilisation and storage infrastructure. ($1 = 0.9171 Swiss francs) Reporting by Brenna Hughes Neghaiwi; Editing by Gareth Jones Our Standards: The Thomson Reuters Trust Principles.