Clean energy investment must triple by 2030 if the world is to get on track to reach net zero by 2050, says the International Energy Agency (IEA) in its World Energy Investment 2021 report.
The $750bn expected to be spent globally on clean energy technologies and efficiency in 2021 is far below what is required to put the energy system on a sustainable path, states the report.
The investment gap is particularly acute in emerging markets and developing economies. Not including China, these account for nearly two-thirds of the global population, but only-one third of global energy investment and one-fifth of clean energy investment. The agency’s executive director Fatih Birol described the emerging market investment gap as a “critical fault line in energy transitions”.
Investment in these markets is set to remain below pre-crisis levels in 2021, while investment in energy globally is forecast to rebound by nearly 10% to $1.9trn, returning to pre-crisis levels.
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Emerging markets and developing economies have a hard job on their hands as they will have to achieve a large increase in investment from a starting point of less fiscal space and more constrained access to finance, states the IEA report.