Global investment in diverse renewables technologies must almost triple annually to $800 billion by 2050 to limit global warming to 1.5 deg C and meet the net-zero target by 2050, says a report

The Global Landscape of Renewable Energy Finance 2020 report by the International Renewable Energy Agency (Irena) and Climate Policy Initiative (CPI) said while a cumulative $1.8 trillion was invested during the five-year period from 2013-2018, the amount still fell short of achieving the global climate commitments. The annual renewable energy investment peaked at $351 billion in 2017.

Francesco La Camera, Irena Director-General, noted a positive investment trend before Covid-19, "but the pandemic had shown that more effort was urgently needed to put us on a climate compatible pathway and help us recover better with a sustainable, resilient economy".

The report said ambitious commitments from governments are needed, backed by supporting measures such as moving subsidies away from fossil fuels, and further investments in system integration and enabling technologies that increase system flexibility such as batteries and energy storage.

The sector can create 5.5 million jobs if an average $2 trillion were invested annually in renewables and other energy transition-related technologies in the 2021-2023-recovery phase, and an additional 19 million jobs by 2030 if the average annual investments hit $4.5 trillion up to 2030, the report said.

The majority of these investments could come from private sources, if government funds are used strategically to nudge investment decisions and financing in the right direction. Public funds are able to leverage private investments by a factor of 3 to 4 if used strategically to steer investments toward clean energy solutions and away from fossil fuels.

Looking ahead, policy makers need to signal long-term political commitment and enhance partnerships with the private sector to boost investors confidence and attract additional private capital in the sector, it added.