The challenge of keeping global warming within the 1.5°C limit set by the Paris Agreement depends crucially on a radical transformation of the energy sector. According to the report by the International Renewable Energy Agency (IRENA) , released during the Pre-COP in Abu Dhabi, renewable energy capacity will need to triple by 2030. However, current progress is falling short of the set targets, requiring annual investments of US$1.5 trillion between 2024 and 2030 to avoid a collapse of climate targets.
The Challenge of Tripling Renewable Energy Capacity
According to the report, the global target of tripling renewable energy by 2030 aims to increase installed capacity from the current 3.9 terawatts (TW) to 11.2 TW . However, current national plans indicate that the world is only expected to achieve half of this growth , creating a significant gap of 3.8 TW that needs to be filled in less than six years. The absence of effective policies and a lack of adequate financing have been highlighted as key obstacles to achieving this ambitious target.
In addition to the need to expand renewable energy capacity, the report highlights that the rate of improvement in energy efficiency also needs to double, from a 2% increase in 2022 to 4% per year by 2030. To achieve this, it will be essential for the transport, construction and industrial sectors to adopt more aggressive measures to electrify and reduce energy consumption, which requires robust infrastructure and regulations that incentivize this transition.
Massive Investments and the Urgency of Effective Policies
The exponential growth of renewable energy depends directly on a dramatic increase in global investment. In 2023 , the sector reached an all-time high of $570 billion , but to meet global needs, this amount will need to triple to $1.5 trillion per year by 2030. The financing gap not only affects the speed of clean energy adoption, but also compromises infrastructure , workforce training and supply chain development.
The report stresses that existing policies are inadequate to deliver the necessary increases in energy capacity and efficiency. It suggests that the third round of Nationally Determined Contributions (NDCs) in 2025 will be crucial to turning this around. New policy directions must be adopted to close the gap and put the world on a path more aligned with climate goals. These include regulatory incentives, subsidies for innovation and a coordinated effort to accelerate financing for the energy transition.
Funding Inequalities and the Role of International Collaboration
One of the biggest challenges to the global energy transition lies in emerging and developing economies , which face severe financing constraints. The report reveals that renewable energy investment in Africa will fall by a staggering 47% between 2022 and 2023 , with sub-Saharan Africa receiving 40 times less investment per capita than the global average.
To reduce this disparity, it will be crucial to mitigate country risks and improve financing conditions, especially through multilateral and bilateral funds . International collaboration will play a vital role in this process, with the aim of better channeling funds and ensuring that all regions of the world can participate in the energy transition equitably.
The agreement on a New Quantified Collective Target (NCQG) , which will be discussed at COP29 in Baku , is seen as a key step towards increasing financial support for developing nations and ensuring that global climate goals are met. Establishing robust financial commitments could even inspire more ambitious targets for NDC submissions in 2025.
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