A new report from the International Renewable Energy Agency (IRENA) has found that we need to increase our annual investments in renewable energy by four times to meet climate goals.
According to IRENA, global investments in renewable energy technologies must exceed $5 trillion annually to align with the Paris climate accord's commitment to limiting temperature increases to 1.5 degrees Celsius above pre-industrial levels.
Last year, investments in renewable energy reached a record of $1.3 trillion, but that is insufficient for tackling climate change.
IRENA highlighted that a total of $35 trillion is required for transition technology by 2030, which includes improving efficiency, electrification, grid expansion, and flexibility.
Renewable energy deployment must increase from around 3,000 GW annually today to over 10,000 GW in 2030 to combat climate change. The agency also emphasized that there must be more equality in renewable expansion between industrialized and developing countries.
There are significant geographical differences in renewable investments. In developed economies, renewable energy investments must only increase by approximately 50% to reach climate mitigation targets. In contrast, developing economies need to increase investments by a factor of six.
Two-thirds of installed renewable capacity last year came from new renewable energy projects in China, the European Union, and the United States. Africa accounted for only 1% of renewable capacity installed.
"A fundamental shift in the support to developing nations must put more focus on energy access and climate adaptation," IRENA Director General Francesco La Camera said, calling on financial institutions to direct more funds towards energy transition projects with better conditions.
The report found that recent years have mainly seen significant investments in wind and solar power generation. Hydrogen, geothermal, and bioenergy investments must also increase to meet climate targets.
The report also emphasizes the urgent need for governments to provide suitable policies to encourage investment in renewable energy. This could include providing subsidies, tax breaks, or implementing a carbon price.
The IRENA report emphasizes that significant investments in renewable energy are necessary to meet these targets. Governments and private investors can make a difference by stepping up and accelerating these investments; otherwise, the world will face devastating consequences due to climate change.
By Michael Kern for Oilprice.com
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