Large investment imbalances persist in developing countries outside China, the International Energy Agency (IEA) said on Thursday.
—
The world is expected to invest $2 trillion in clean energy technologies and infrastructure – nearly double the amount invested in planet-warming fossil fuels – according to a new report.
Falling costs and improving supply chains are driving global investment in clean technologies such as renewables, electric vehicles, nuclear, grids, storage and heat pumps, the International Energy Agency said in its annual World Energy Investment Report released on Thursday. Just over $1 trillion is spent on coal, gas and oil. Global spending on renewables and grids combined surpassed investment in fossil fuels for the first time last year.
“Clean energy investment is setting new records even in tough economic times, highlighting the momentum of the new global energy economy. For every dollar invested in fossil fuels, almost two dollars are now invested in clean energy,” said IEA Executive Director Fatih Birol.
China leads the way as the world’s largest investor in clean energy this year, spending 3.7 times more than projected on fossil fuels. Europe comes in second with an estimated $370 billion in clean energy investments, followed by North America at $315 billion. North America remains the largest investor in fossil fuels, despite pumping 1.2 times more money into clean energy. In the Middle East, Africa and Eurasia, spending on fossil fuels still exceeds spending on clean energy.
“Increased spending on clean energy is supported by a strong economy, continuing cost reductions and energy security considerations,” Birol said, pointing to policy initiatives adopted by major countries to speed up the energy transition, such as the multi-billion dollar America’s Fight Inflation Act.
Emerging and developing countries, however, are lagging behind: For every dollar that developed countries and China invest in battery storage, other emerging and developing countries invest just one cent, according to the report.
As module prices continue to fall, solar photovoltaics (PV) is expected to dominate investment this year, with the world pouring about $500 billion into the technology, more than all other power generation technologies combined, according to the report.
Also see: How to save money on your electricity bill with solar panels
The burning of coal, natural gas and oil for electricity and heat is the largest source of greenhouse gas (GHG) emissions that trap heat in the atmosphere and increase the Earth’s surface temperature, the main cause of global warming. Global fossil fuel consumption has more than doubled over the past 50 years as countries around the world seek to improve living standards and economic production. In 2023, all three of the most potent greenhouse gases – carbon dioxide (CO2), methane and nitrous oxide – reached record highs.
The energy sector is the world’s leading source of emissions and is key to tackling the global climate challenge. The IEA has called on countries to halt new gas and oil projects, arguing this is the only way to maintain a net-zero emissions scenario compatible with 1.5°C. Last year, the agency projected that global power sector carbon dioxide emissions will reach a tipping point in 2025 as renewables and other clean energy sources, including nuclear, are expected to meet all of the growth in global electricity demand over the next three years.
Featured Image: Andrew Watson/Climate Visuals Countdown
This story is funded by readers like you
Our nonprofit newsroom offers climate coverage free of charge and supports advertising. Your one-time or monthly donation supports our work, expands our reach, and plays a vital role in maintaining our editorial independence.
About EO | Mission Statement | Impact and Scope | Contribute
