Investment in renewable energy must accelerate more rapidly to meet climate goals, a new report from the International Energy Agency (IEA) finds.
Although 2021 is forecast to be the sixth year in a row when investment in the power sector exceeds that in oil and gas, with renewables accounting for 70% of new power generation capacity, the world is not yet on track to net-zero emissions by 2050, according to the World Energy Investment 2021 report.
An estimated $750 billion will be spent on clean-energy technologies and efficiency in 2021 — about a third of what the annual spend needed this decade to get on track for net-zero emissions by 2050.
IEA executive director Fatih Birol called for "clear policy signals from governments" to spur investment in clean energy. "Our roadmap shows there are huge opportunities for companies, investors, workers and entire economies on the path to net zero. Governments have the power to unlock these broad-based benefits," he said.
Oil and gas majors are diversifying investment, but change is slow. Estimates point to clean-energy investment rising from 1% historically to 4% this year on average, with only some leading European companies achieving more than 10%.
The gap between current investment trends and climate goals is particularly large in emerging markets and developing economies, the report finds. A new IEA report addressing this challenge is due to be released next week.