Global investment in clean energy technologies is still far below where it needs to be for the world to reach net-zero greenhouse gas emissions by 2050, according to a major new report from the International Energy Agency. To close the gap, annual investment for the rest of this decade needs to be three times higher than it was in 2021.
The size of this gap has two important implications. First, for every year that goes by without a significant scale-up in investment, the gap for future years will be even greater, and the odds of meeting the Paris Agreement goal to limit warming to 1.5°C above pre-industrial levels will be further out of reach.
Second, the expansion of carbon pricing will continue to make fossil fuels more expensive even if clean energy isn’t ready to take the reins. That means the global energy market is likely to see more sudden price spikes like those that have wracked Europe, China, and India over the past month.
Still, the IEA report dangles the promise of massive profits for investors who do make early moves into clean energy. By 2030, in IEA’s net-zero scenario, the size of the global market for clean tech surpasses the value of the oil market, rising from $122 billion to $870 billion. That increase is driven primarily by explosive growth in the market for batteries to store energy for electric vehicles and the electric grid. By 2050, IEA projects, batteries alone could be worth as much as oil will be worth in 2030.
The report also reasserts an argument that IEA first made back in May: There’s no room in the net-zero scenario for any new oil and gas development after this year.