Investing in clean transport will support economic recovery, finds report

Advancing the renewables-based energy transformation is an opportunity to meet international climate goals while boosting economic growth, creating millions of jobs and improving human welfare by 2050, the first Global Renewables Outlook released by the International Renewable Energy Agency (IRENA) has suggested.

While a pathway to deeper decarbonisation requires total energy investment up to $130 trillion, the socio-economic gains of such an investment would be massive, the Outlook revealed. Transforming the energy system could reportedly boost cumulative global GDP gains above business-as-usual by $98 trillion between now and 2050.

IRENA’s Director-General, Francesco La Camera, said: “Governments are facing a difficult task of bringing the health emergency under control while introducing major stimulus and recovery measures. The crisis has exposed deeply embedded vulnerabilities of the current system. IRENA’s Outlook shows the ways to build more sustainable, equitable and resilient economies by aligning short-term recovery efforts with the medium-and long-term objectives of the Paris Agreement and the UN Sustainable Development Agenda.

“By accelerating renewables and making the energy transition an integral part of the wider recovery, governments can achieve multiple economic and social objectives in the pursuit of a resilient future that leaves nobody behind.”

The Global Renewables Outlook examined building blocks of an energy system along with investment strategies and policy frameworks needed to manage the transition. It explored ways to cut global CO₂ emissions by at least 70 per cent by 2050.

Building on five technology pillars, particularly green hydrogen and extended end-use electrification, the Outlook outlined how governments can help replace fossil-fuels and slash emissions in heavy industry and hard-to-decarbonise sectors such as transport.

The Outlook also looked at energy and socio-economic transition paths in 10 regions worldwide. Despite varied paths, 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 per cent shares in their total energy mixes by 2050. Similarly, electrification of end uses like transport would reportedly rise everywhere, exceeding 50 per cent in East Asia, North America and much of Europe.

Raising regional and country-level ambitions will be crucial to meet interlinked energy and climate objectives and harvest socio-economic welfare, the Outlook suggested. Stronger coordination on international, regional and domestic levels will be equally important, it concluded, with financial support being directed where needed including to the most vulnerable countries and communities.