BAKU, Azerbaijan, March 30. The 1.5°C Scenario will require investments of USD 5.7 trillion per year until 2030. Investment decisions are long-lived, and the risks of stranded assets are high, so decisions should be guided by long-term logic, Trend reports with reference to the World Energy Transition Outlook published by the International Renewable Energy Agency (IRENA).
IRENA estimates that USD 0.7 trillion in annual investments in fossil fuels should be redirected towards energy transition technologies.
“Measures to eliminate market distortions, coupled with incentives for energy transition solutions, will facilitate the necessary changes in funding structures. Most of the additional capital is expected to come from the private sector. But public financing will also have to double in order to catalyse private finance and create an enabling environment for speedy transition with optimal socio-economic outcomes. By 2030, the 1.5°C-aligned energy transition promises the creation of close to 85 million additional energy transition-related jobs compared to 2019 and support a boost in global gross domestic product (GDP). The additional 26.5 million jobs in renewables and 58.3 million extra jobs in energy efficiency, power grids and flexibility, and hydrogen more than offset losses of 12 million jobs in the fossil fuel and nuclear industries,” reads the report.
While global GDP is boosted under the 1.5°C pathway, IRENA reveals that regional and country-level variances will depend highly on policy and regulatory measures and international co-operative flows of financial assistance and knowledge.
“The largest energy consumers and carbon emitters will have to implement the most ambitious plans and investments by 2030. This will require going beyond long-term decarbonisation commitments and setting out concrete operational targets, plans and policies for the short and medium term. G20 and G7 countries have a critical role in leading the global energy transition effort at the international level. Funds and knowledge must be made,” said the agency.
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