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IRENA's World Energy Transitions Outlook shows that action on climate goes hand-in-hand with economic growth

image credit: https://www.irena.org/
Sean Ratka's picture
Associate Programme Officer, International Renewable Energy Agency (IRENA)

Currently focused on the roles of blockchain, AI and IoT in the renewable energy transition.

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  • Aug 24, 2021
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Written by: Barbara Jinks, Jeffrey Lu, and Gayathri Prakash (International Renewable Energy Agency - IRENA)

 

Insights from IRENA’s World Energy Transition Outlook (WETO) show that the energy transition needed to limit temperature rise to 1.5°C goes hand-in-hand with economic growth and job creation. Especially in support of a post-COVID recovery, countries and economies around the world must embrace the adoption of clean, renewable energy to further their economic and social agendas. Policymakers, businesses, organisations and individuals must work together to reap the benefits of a decarbonised world.

As highlighted in the WETO, there is no ‘one-size-fits’ all solution. Therefore, it makes sense for policymakers and organisations to explore all methods of decarbonisation which will drive innovation, job creation and economic growth. With the dramatically falling costs of renewable technologies, the benefits will greatly exceed the costs. In order to limit global temperature rise to 1.5°C, cumulative additional investment of USD 33 trillion will be required from now to 2050. But for every dollar spent, 2-5.5 dollars would be gained through reduced externalities from health and environmental costs associated with climate change. In cumulative terms, this adds up to at least USD 61 trillion to USD 163 trillion by 2050. The energy transition goes far beyond technology and requires deep structural changes to economies and societies.

With the potential for so much economic and social value to emerge from the energy transition, there remains a lack of enabling policy frameworks to unlock capital flow and financing for renewable energy. As pointed out in the report, markets alone are not likely to move fast enough to encourage the adoption of renewables in time to reach the 1.5°C targets by 2050. Policymakers need to take actions now to incentivise capital flow and financing into renewable energy and eliminate current market distortions and the path dependency of fossil fuels. This requires eliminating fossil fuel subsidies, changing fiscal and monetary policies and outlining financial pathways for the adoption of renewable energy.

Not only must countries do their part in enabling the energy transition, but international cooperation and cross-border trade are also critical to achieving a ‘just transition’. Without this cooperation, the energy transition risks inequitable outcomes, dual-track development between countries and a slowdown in overall progress.

With very steep but achievable targets outlined in the World Energy Transition Outlook, individual countries and the international community have a long road ahead if the 1.5°C climate ambitions are to be achieved. The question is, are we currently doing enough to reach our goals? And more importantly, are we doing it fast enough?

More information here:

https://www.irena.org/newsroom/pressreleases/2021/Jun/IRENAs-World-Energy-Transitions-Outlook-Re-Writes-Energy-Narrative-for-a-Net-Zero-World

Discussions
Matt Chester's picture
Matt Chester on Aug 24, 2021

This requires eliminating fossil fuel subsidies, changing fiscal and monetary policies and outlining financial pathways for the adoption of renewable energy.

How impactful can these measures be in certain countries if others in the global marketplace aren't also taking them? Does the action need to be uniform across all nations, or can the leaders in this regard make significant impact through individual action in this direction? 

Dr. Amal Khashab's picture
Dr. Amal Khashab on Aug 24, 2021

Hi Matt

I think leading countries have to make significant individual actions to convince others.

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