A new report released today calls for an increase in global energy investment levels to ensure the 1.5°C Paris climate targets are met. In its World Energy Transitions Outlook report, the International Renewable Energy Agency (IRENA) spells out how this can achieved while growing the global economy.
“The World Energy Transitions Outlook outlines a pathway for the world to achieve the Paris Agreement goals and halt the pace of climate change by transforming the global energy landscape,” IRENA said. “This report presents options to limit global temperature rise to 1.5°C and bring CO2 emissions to net zero by 2050, offering high-level insights on technology choices, investment needs, policy framework and the socio-economic impacts of achieving a sustainable, resilient and inclusive energy future.”
IRENA said this decade will be ‘decisive’ in efforts achieve the Paris and Sustainable Developments goals. And it warns any delay in the energy transition will drive up temperatures and lead to irreversible economic and humanitarian disasters.
“There is consensus that an energy transition grounded in renewables and efficient technologies is the only way to give us a fighting chance of limiting global warming by 2050 to 1.5°C,” said said Francesco La Camera, IRENA’s Director-General. “As the only realistic option for a climate-safe world, IRENA’s vision has become mainstream.”
He added: “Energy transition is a daunting task but can bring unprecedented new possibilities to revitalise economies and lift people out of poverty. IRENA’s Outlook brings unique value as it also outlines the policy frameworks and financing structures necessary to advance a transition that is just and inclusive. Each country will define what is the best for them, but collectively, we must ensure that all countries and regions can realise the benefits of the global energy transition for a resilient and more equitable world. We have the know-how, we have the tools, we need to act, and do so now.”
IRENA wants to see ‘annual investment of USD 4.4 trillion’ and steps such as the phasing out of coal, and increased support in areas including hydrogen, renewables and end-use electrification, to help accelerate the transition.
The full report can be downloaded here.
Another paper released today by University College London (UCL) researchers calls for fairer access to low-cost finance to help Africa switch to renewable energy. The study says if this happens Africa can reach net zero emissions a decade early.
The playing field is currently far from level due to the weighted average cost of capital (WACC): the ‘financial ratio used to calculate how much a company or organisation pays to finance its operations – the lower the value, the easier the company or government can access funds’. In looking at WACC values researchers found that in Africa the region’s green electricity production is being stunted by 35%.
Lead author Dr Nadia Ameli (UCL Institute for Sustainable Resources) said: “Our research shows how earlier action to improve financing conditions could have a significant impact on the speed and timing of the transition to renewable energy in lower and middle-income countries which, in turn, will significantly help to protect our planet.”
Dr Ameli added: “We don’t believe it is fair that regions where people are already losing their lives and livelihoods because of the severe impacts of climate change also have to pay a high cost of finance to switch to renewables. Radical changes in finance frameworks are needed to better allocate capital to the regions that most need it. We should take the opportunity to reframe international market finance, where lower cost of capital for developing economies would allow for low-carbon development at a more internationally equitable cost. The sooner we act the better.”