Low-carbon energy investment must increase 250% by 2030 if countries are to meet their targets under the 2015 Paris Agreement, the International Energy Agency warned this week.
“The bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner energy technologies to change course,” IEA Executive Director Fatih Birol said in a release. “Whichever way you look, we are storing up risks for the future.”
To meet the targets in the IEA’s Sustainable Development Scenario (SDS), the agency’s attempt at modelling a future in which Paris targets are met and air pollution drops significantly, low-carbon investment would have to shift from 35 to 65% of total energy finance, Carbon Brief reports.
“Overall, the research found that global investment in all forms of energy supply and demand stabilized in 2018 at around US$1.85 trillion, after three years of decline. Within that total, investment in low-carbon energy was also stable at around US$620 billion,” Carbon Brief notes. The analysis showed coal development funding that “comfortably exceeds” targets for the late 2020s, North American oil and gas projects consuming one out of every 10 dollars spent in energy, China investing more than the U.S. overall, but the U.S. exceeding all other countries—including the Middle East and Russia—in its rush to develop fossil fuels.
While “investment in exploration for new oil and gas reserves continues to fall, and actually reached record lows in 2018,” the IEA foresees an 18% increase in 2019, driven most recently by new offshore reserves from Cyprus to Guyana. In recent years, “spending in the sector almost halved between 2014 and 2018, due in part to the collapse of oil prices and, as a result, the discovery of new oil reserves fell by around two-thirds compared to the average over the previous decade,” Carbon Brief writes.
The analysis does show that the apparent stagnation in global renewable energy investment is partly a matter of plummeting project costs. “In a trend also playing out for oil and gas, a dollar spent on renewable energy now buys significantly more than it did in the past,” the news story states. “Once falling costs have been adjusted for, the IEA’s figures show a slight increase in renewable investment every year this decade and a 55% rise since 2010.” And “each gigawatt of renewable capacity is also getting faster to build, which could reflect a shift from wind towards solar installations with shorter construction times.”
The IEA also reported global electric vehicle sales approaching two million in 2018, nearly a 70% increase in just 12 months.