The International Energy Agency (IEA) has said that investment in renewables must more than triple to $1.3trillion annually by 2030 if the world is to reach net-zero emissions by 2050.
In its World Energy Outlook 2022 released yesterday, the agency said it had previously estimated that clean energy would need $1trillion in annual investment to reach the climate goals.
The IEA said that electricity generation from renewables needs to see one of the largest increases in investment in the Net Zero Emissions (NZE) Scenario, rising from $390 billion in recent years to $1.3 trillion by 2030.
This level of annual spending in 2030, the agency posits, would be equal to the highest level ever spent on fossil fuel supply, $1.3 trillion spent on fossil fuels in 2014.
The report further said that concerns about fuel prices, energy security, and emissions – bolstered by stronger policy support – are brightening the prospects for many lower missions fuels.
Clean energy investment is massive today, but it needs to rise much more if the world has a chance to get to net zero by 2050.
“A huge increase in energy investment is essential to reduce the risks of future price spikes and volatility, and to get on track for net zero emissions by 2050,” the IEA said.
“Governments should take the lead and provide strong strategic direction, but the investments required are far beyond the reaches of public finance. It is vital to harness the vast resources of markets and incentivize private actors to play their part,” the agency noted.
For every $1 spent globally today on fossil fuels, $1.5 is spent on clean energy technologies. Under the NZE Scenario, every $1 spent on fossil fuels needs to be outmatched by $5 spent on clean energy supply and another $4 on efficiency and end uses by 2030.
“Shortfalls in clean energy investment are largest in emerging and developing economies, a worrying signal given their rapid projected growth in demand for energy services. If China is excluded, then the amount being invested in clean energy each year in emerging and developing economies has remained flat since the Paris Agreement was concluded in 2015,” the IEA said.