Investments in renewables to decarbonise energy systems will boost short term economic growth, stall the economic recession triggered by COVID-19, and create millions of jobs says the latest Global Renewables Outlook released by the International Renewable Energy Agency (IRENA) and lays out the path for energy transformation by 2050.
Between now and 2050, an ambitious investment of $130 trillion in renewables, would bring a huge spike in cumulative global GDP by $98 trillion, the Outlook said. This ambitious outlook would also cut 70% of global energy-related carbon dioxide (CO2) emissions by 2050 with over 90% of this reduction achieved through renewables and clean energy. The report says building on five technology pillars, particularly “green hydrogen” and extended end-use electrification could help replace fossil-fuels and slash emissions in heavy industry and hard-to-decarbonise sectors.
Savings from low-carbon investments would be eight times the costs when accounting for health and environmental impacts, the Outlook says. A climate-safe path would require cumulative energy investments of $110 trillion by 2050, and additional $20 trillion to touch full carbon neutrality.
The Outlook warns that the last portion of the global CO2 emissions will be “the hardest and most expensive to eliminate.” An ambitious energy transition would still leave global emissions at about one-third of their current levels, with energy-intensive industries, shipping and aviation still emitting heavily in 2050, IRENA reported. An estimated 60% of the reductions in this final stretch could come from renewables, “green hydrogen” and renewable-based electrification, the report said.
The Outlook also analysed 10 regions worldwide and found that all regions are expected to see higher shares of renewable energy use, with Southeast Asia, Latin America, the European Union and Sub-Saharan Africa poised to reach 70-80% shares of renewables in their total energy mixes by 2050. Similarly, electrification of end uses like heat and transport would rise everywhere, exceeding 50% in East Asia, North America and much of Europe. All regions would witness rise in their welfare and net job gains in the energy sector despite losses in fossil fuels. However, economy-wide, regional job gains are distributed unevenly, the Outlook warns.
IRENA’s Director-General Francesco La Camera said as governments release massive subsidies for recovery, Covid19 crisis has exposed deep vulnerabilities of the current system. The Outlook shows the ways to build more resilient economies by aligning short-term recovery efforts with the medium-and long-term objectives of the Paris Agreement,
“There is a clear need for ambitious investment in infrastructure to sustain a low-carbon future. Accelerating the transition towards renewable energy can create much-needed jobs and stimulate the economy at this crucial time, said Laurence Tubiana, of European Climate Foundation.
More than ever, global commodities such as oil and liquified natural gas are susceptible to global market shocks. The world needs to move away from insecure fossil fuel energies, which are vulnerable to the oncoming threat from climate change and have low returns with high risks. The global pandemic has sped up the peak of the fossil fuel era, Kingsmille Bond of Carbon Tracker Initiative points out. As the world looks to recover from Covid19 and economic crises, we face a choice: We can pursue a modern, clean, healthy energy system, or we can go back to the old, polluting ways of doing business, Andrew Steer, of World Resources Institute said.