Page 16 - Energize June 2021

NEWS

MAKE CLEAN ENERGY IN EMERGING AND DEVELOPING

ECONOMIES TOP PRIORITY

Information from the International Energy Agency

he world’s energy and climate future increasingly hinges on whether emerging
and developing economies are able to successfully transition to cleaner energy
Tsystems, calling for a step change in global efforts to mobilise and channel
the massive surge in investment that is required, according to a new report by the
International Energy Agency.
The special report – carried out in collaboration with the World Bank and the World
Economic Forum – sets out a series of actions to enable these countries to overcome
the major hurdles they face in attracting the financing to build the clean, modern, and
resilient energy systems that can power their growing economies for decades to come.

Click here to download the report

Annual clean energy investment in emerging and developing economies needs to
increase by more than seven times – from less than US$150-billion last year to over
$1-trillion by 2030, to put the world on track to reach net-zero emissions by 2050. Unless
much stronger action is taken, energy-related CO2 emissions from these economies –
which are mostly in Asia, Africa and Latin America – are set to grow by 5-billion tonnes change and other crises. With the right
over the next two decades. policies and investments, countries can
“In many emerging and developing economies, emissions are heading upwards while achieve lasting economic growth and
clean energy investments are faltering, creating a dangerous fault line in global efforts to poverty reduction without degrading the
reach climate and sustainable energy goals,’’ said Fatih Birol, the IEA Executive Director. environment or aggravating inequality. The
“Countries are not starting on this journey from the same place – many do not have broader financial sector can and must play
access to the funds they need to rapidly transition to a healthier and more prosperous a key role in achieving the goals of the Paris
energy future – and the damaging effects of the Covid-19 crisis are lasting longer in many Agreement by mobilizing capital for green
parts of the developing world.” and low-carbon investments, while managing
“There is no shortage of money worldwide, but it is not finding its way to the climate risks. The World Bank will continue
countries, sectors and projects where it is most needed,” Dr Birol said. “Governments to support countries that seek assistance to
need to give international public finance institutions a strong strategic mandate to transition away from fossil fuels and scale up
finance clean energy transitions in the developing world.” low-carbon, renewable energy, and energy
Recent trends in clean energy spending point to a widening gap between advanced efficiency investments,” said Demetrios
economies and the developing world even though emissions reductions are far more Papathanasiou, the World Bank Global
cost-effective in the latter. Emerging and developing economies currently account for Director for Energy and Extractives.
two-thirds of the world’s population, but only one-fifth of global investment in clean “The need to scale clean energy in
energy, and one-tenth of global financial wealth. emerging economies offers a massive
Avoiding a tonne of CO2 emissions in emerging and developing economies costs investment opportunity. This report shows
about half as much on average as in advanced economies, according to the report. that current challenges to get this capital to
But emerging market and developing economies seeking to increase clean energy the right places can be overcome through
investment face a range of difficulties, which can undermine risk-adjusted returns for a combination of smart policies, financial
investors and the availability of bankable projects. innovation, as well as bold collective action.
“A major catalyst is needed to make the 2020s the decade of transformative clean The World Economic Forum is committed to
energy investment,” said Dr Birol. “The international system lacks a clear and unified enabling multistakeholder cooperation to
focus on financing emissions reductions and clean energy – particularly in emerging accelerate progress in this important area,”
and developing economies. Today’s strategies, capabilities and funding levels are well said Børge Brende, President of the World
short of where they need to be. Our report is a global call to action – especially for those Economic Forum.
who have the wealth, resources and expertise to make a difference – and offers priority
actions that can be taken now to move things forward fast.” Click here to download the report
“As we expand energy access, we also need a global transition to low-carbon energy.
It is critical to develop solutions that make energy systems more resilient to climate Contact www.iea.org/

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