Global government investments in clean energy surpass $1.3T, additional policy packages to come online soon

Oil&Gas Materials 5 June 2023 12:44 (UTC +04:00)
Maryana Ahmadova
Maryana Ahmadova
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BAKU, Azerbaijan, June 5. Global governments have invested around $1.34 trillion for clean energy investment support since 2020, Trend reports.

In the push for clean energy transition, government spending has played a pivotal role in driving significant investment growth since 2020. Notably, clean energy investment has witnessed a remarkable surge of nearly 25 percent between 2021 and 2023, surpassing the growth rate of fossil fuels during the same period, the International Energy Agency (IEA) reported.

Over the past six months, an impressive $130 billion in new government spending has been allocated to support clean energy initiatives, even during a relatively slower period for new allocations amid the ongoing COVID-19 pandemic.

While this recent slowdown in spending may raise concerns, it appears to be temporary as several countries are actively considering additional policy packages. These initiatives are being discussed in key regions such as the EU, Australia, Brazil, Canada, and Japan. The proposed allocations primarily focus on bolstering mass and alternative transit modes, promoting low-carbon electricity generation projects, and stimulating sales of low-carbon vehicles.

When considering all measures implemented since 2020, it is noteworthy that direct incentives targeting manufacturers to strengthen domestic clean energy production have reached a cumulative total of approximately $90 billion. These incentives aim to foster a thriving ecosystem for clean energy manufacturing within their respective countries.

As governments worldwide recognize the urgency of transitioning to a sustainable and low-carbon future, the commitment to clean energy investment remains strong. With ongoing policy discussions and substantial financial support, the global clean energy sector is poised for continued growth and advancement.

Meanwhile, in response to the ongoing global energy crisis, governments have taken significant measures to address short-term consumer affordability concerns, with a total allocation of $900 billion. These efforts are in addition to existing support programs and subsidies aimed at mitigating the impact of rising energy costs. Notably, approximately 30 percent of this affordability spending has been announced in the last six months, reflecting a renewed focus on addressing immediate challenges.

However, there have been calls for better targeting of these measures to prioritize households and industries facing the greatest hardships. Regrettably, only 25 percent of the affordability measures are specifically directed towards low-income households and the most-impacted industries. This discrepancy raises concerns about the equitable distribution of support and the effectiveness of these measures in providing relief to those in greatest need.