Five Key Energy Choices We Need to Make Now For a Climate Safe Future
The pathway to a prosperous and sustainable future exists and is achievable
A $33 trillion funding gap stands between the world and its goal of limiting energy related emissions enough to keep global temperature rise to within 1.5°C by 2050. But through sound choices, cooperation, and immediate action, we can avoid the worst effects of an overheating planet and create a more resilient and prosperous world.
In a pandemic-fueled era of economic recovery, IRENA’s landmark report, World Energy Transitions Outlook: 1.5° Pathway, demonstrates how the multi-trillion dollar investment would pay for itself many times over, not only in the future, but immediately with cleaner more inclusive global growth.
Following COP26, where world leaders gathered to make commitments that safeguard our climate and stimulate global economies, it is now crucial to ensure concrete steps are taken to increase the pace towards meeting these goals. So, how can this accelerated timeline – and additional investment – be achieved?
Here are the five key energy choices global leaders need to make now.
Invest in the future of energy
While there is a broad consensus that spending on sustainable infrastructure is crucial to rebuilding the global economy following the COVID-19 pandemic, existing plans fall far short the amounts required for the energy transition.
IRENA’s analysis demonstrates a need for $131 trillion in investment between now and 2050, $33 trillion more in energy spending than is currently committed. But much of the $98 trillion planned requires reallocating, because only a fraction is currently earmarked for renewables, increasing the risk of stranded assets and threatening climate goals.
To achieve carbon neutrality by 2050, renewable energy investments alone must triple from an average $300 billion annually to more than $800 billion. Fossil fuel related spending, even amid an energy crunch, must be curtailed.
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Focus on the benefits, not the costs
Beyond the climate imperative, there are strong incentives for directing investment towards the energy transition. According to IRENA, there is a $2-$5.5 return to the global economy from every additional $1 spent on the transition. Every million dollars spent on the transition creates three times more jobs than the same amount invested in fossil fuels. By 2050, total energy sector jobs would rise significantly from today’s 60 million, to around 120 million. But the benefits are not confined to the long-term. Investment may be frontloaded, but so is the return.
There are significant corollary advantages as well. Renewable power technologies now dominate the global market for new electricity generation capacity, as they have become the cheapest sources of electricity in many markets. And 80% of the world’s population lives in countries that are net importers of energy. In most cases, moving towards a renewable-based electricity system means leveraging domestic renewable sources, providing vital energy supply security – insulating households and businesses from volatile fuel prices.
Harness existing technologies
To achieve the 1.5° target, the bulk of emissions reductions will come from three pillars: Transitioning to renewable energy, electrifying end-uses such as vehicles and heating – and reducing energy intensity.
Most of the technologies required to achieve these goals already exist. Mature technologies, such as AI optimization, electric vehicles, solar panels, and wind turbines simply need faster, broader deployment.
Others, like green hydrogen, need further innovation to bring down costs and will provide a critical opportunity to decarbonize more challenging sectors such as shipping, aviation, and industry.
In either case, the right support can significantly accelerate timelines. The solutions are available and operational in countries, cities, and communities around the world today. They just need to be scaled.
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Forge meaningful partnerships for an inclusive transition
Inter-governmental and inter-sectoral partnerships are achieving global carbon neutrality goals. While public policy and investment are essential for directing the market, much of the implementation work will fall to the private sector.
Without substantial international cooperation the energy transition also risks being uneven. For example, where green hydrogen is most advanced in places like China and the EU, emissions-free haulage could be achieved faster than in countries with less advance hydrogen capabilities.
Initiatives like the Climate Investment Platform (CIP) – announced in 2019 by the United Nations Development Programme (UNDP), IRENA, Sustainable Energy for All (SEforALL) and the Green Climate Fund (GCF), and IRENA’s work with the Abu Dhabi Fund for Development – are therefore pivotal in reorienting climate capital towards promising, investment-ready initiatives in developing countries to support an inclusive, just and equal transition.
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Be a leader, act now
We are running out of time to safeguard the future of humanity. The first step in averting the worst effects of climate change is reducing emissions to just 45% of 2010 levels by 2030. Current plans are projected to fall far short of this target.
The implications are clear. Immediate action is required. While any agreement at COP26 will be welcome, it must be followed swiftly by concrete policy and finance implementation.
The technology is already available. The roadmap is clear. Agencies like IRENA can join the dots between countries, sectors, and organizations to unlock barriers and establish practical, national pathways. Ultimately, the transition leads to greater prosperity, not less. The world is not waiting for solutions. It is waiting for leadership.
The window is closing and the pathway to a net zero future is narrowing. Choices we make in the coming years will have a far-reaching impact. Our shared future will only be bright if we move together.
Francesco La Camera, Director-General, IRENA
