Financing for clean energy in emerging and developing economies, excluding China, must increase sevenfold within a decade if global warming is to be contained. level, the International Energy Agency (IEA) says.
To keep temperatures from rising to disaster levels, annual investment in non-fossil fuel energy in Global South countries must jump from $260bn to nearly $2 trillion, the intergovernmental agency says. in a report on Wednesday.
“Clean energy financing in the developed and developing world is the fault line in achieving international climate goals,” IEA Executive Director Fatih Birol told reporters.
The report was released on the eve of the two-day Summit for a New Global Financing Pact in Paris, which seeks to strengthen support for reforming the mid-20th century architecture that governs financial flows from rich to developing countries.
The G20 countries have historically been responsible for 80 percent of global carbon emissions, which are damaging the Earth’s climate.
“Many fragile, low-income states are burdened by economic shocks, debts they cannot pay, and the effects of climate change – a crisis to which they have contributed little, but costs the people of these countries,” Agnès Callamard, The secretary general of Amnesty International, said in a statement.
“These are unprecedented challenges that require a rethinking of how the world’s financial architecture is built.”
Private investment
Accelerating the transition from dirty to clean energy and helping the Global South cope with and prepare for the damaging effects of climate are high on the agenda of the summit.
Nearly 800 million people lack electricity and 2.4 billion do not have access to clean cooking fuels, most of whom live in poor and developing countries.
Under current policy trends, one-third of the increase in energy use in these countries in the next decade will be met by burning fossil fuels, the main driver of global warming, the IEA warns.
According to Birol, investment in clean energy is increasing, but “the bad news is that more than 90 percent of the increase in clean energy since the Paris Agreement in 2015 comes from advanced economies and China.”
To unlock the potential for clean energy in emerging and developing economies, the report highlights the need for greater international technical, regulatory and financial support.
According to the IEA report, two-thirds of the financing for clean energy projects in developing and emerging economies excluding China “must come from the private sector” because the investment in the public sector “is not enough to provide universal access to energy and deal with climate change.”.
🗣 “Investment needs exceed the capacity of public financing alone, making it urgent to rapidly scale up even more private financing for clean energy projects in the -developed and developing economies”
More from our Executive Director @fbirol 👉 https://t.co/0jWtZMO1Zb pic.twitter.com/fO6ILFCMuB
– International Energy Agency (@IEA) June 21, 2023
With China included in the calculation, private and public money poured into renewables and other forms of carbon-neutral energy should more than triple from $770bn by 2022 to $2.5 trillion annually in early part of the 2030s.
Over the next decade, the current $135bn in annual private financing for clean energy in these economies should rise to nearly $1 trillion a year.
Solar energy: Leading alternative
According to the IEA report, there is potential for a rapid increase in renewable energy. Solar power is now the cheapest source of electricity in the world.
At least 40 percent of the global solar radiation that reaches the planet is in sub-Saharan Africa, and yet almost 10 times more solar capacity was installed in China last year than in the entire African continent.
Sunny sub-Saharan Africa produces less solar electricity than the Netherlands, Birol said.
Amnesty raised the issue that low-income countries “unequally phase out fossil fuels, protect people from the harms of the climate crisis and provide solutions to the most affected”, especially when the rich countries “continue to avoid their obligations of international cooperation and assistance” .
The summit in Paris on Thursday should act to ensure rich countries “commit to comprehensive debt relief for low-income countries” and “honor past financial commitments they have not met” in previous climate aid agreements, Amnesty said.
“This summit should provide an opportunity for global leaders to protect the rights of the world’s poorest people – not shift the burden to those who suffer the most but contribute the least to the cause of this crisis,” it added.
