IRENA calls for more equitable flow of energy transition investment

Global investment in energy transition technologies, including energy efficiency, reached a new record of USD 1.3 trillion (EUR 1.2bn) last year, increasing 19% from 2021 and 50% from before the pandemic in 2019.

This is, however, far from what is needed to keep the world on track for a 1.5 degrees C warming scenario and also shows “glaring disparities” between developed and developing countries, the International Renewable Energy Agency (IRENA) says in a joint analysis with Climate Policy Initiative (CPI), entitled Global Landscape of Renewable Energy Finance 2023.

Investment in renewable energy reached a record of USD 0.5 trillion in 2022, which is less than 40% of the average annual investment required in the period 2021-2030 under IRENA’s 1.5 degrees C Scenario.

The report says that investments are increasingly concentrated in a number of regions and countries. More than 70% of the global population, mostly residing in developing and emerging countries, received only 15% of global investments in renewables in 2022.

“For the energy transition to improve lives and livelihoods, governments and development partners need to ensure a more equitable flow of finance, by recognising the different contexts and needs,” said IRENA director-general Francesco La Camera. “This joint report underscores the need to direct public funds to regions and countries with a lot of untapped renewables potential but find it difficult to attract investment,” he added.

In addition, the report finds that fossil fuel investments are on the rise after a brief decline in 2020 due to COVID-19. Subsidies for the fossil fuel industry also doubled in 2021 across 51 countries.

(USD 1 = EUR 0.939)

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