Clean energy investment will account for almost three-quarters of the growth in overall energy investments globally this year, according to a new report by the International Energy Agency (IEA).
The report said that investment in clean energy is set to exceed $1.4 trillion in 2022.
The annual average growth rate in clean energy investment in the five years after the signature of the Paris Agreement in 2015 was just over 2%, however since 2020 the rate has risen to 12% “well short of what is required to hit international climate goals, but nonetheless an important step in the right direction” IEA noted in its ‘World Energy Investment 2022’ report.
The highest clean energy investment levels in 2021 were in China ($380bn), followed by the European Union ($260bn) and the United States ($215bn).
The gains “have been underpinned by the increasing cost-competitiveness of many clean energy technologies and by policy and fiscal measures enacted to support transitions, often as part of efforts to ensure sustainable post-pandemic recoveries,” it said.
The IEA Sustainable Recovery Tracker estimated in early 2022 that governments worldwide earmarked $710bn for long-term clean energy and sustainable recovery measures.
However “despite some bright spots, such as solar in India” clean energy spending in emerging and developing economies – excluding China – “remains stuck at 2015 levels, with no increase since the Paris Agreement was reached.”
This is amid scarce public funding to support sustainable recovery, weak policy frameworks and rising borrowing costs, IEA noted.
Overall, global energy investment is set to rise 8% in 2022 to reach $2.4 trillion.