Global investments in renewable energy transition technologies have reached an all-time high, totaling $1.3 trillion by 2022. According to the research “Global Landscape of Renewable Energy Financing 2023,” the new record-high increased by 19% from 2021 investment levels and 50% from before the epidemic in 2019.
The International Renewable Energy Agency (IRENA) and the Climate Policy Initiative (CPI) released a joint report on the sidelines of the Spanish International Conference on Renewable Energy in Madrid.
It also discovers that, while reaching a record high of $0.5 trillion in 2022, worldwide investment in renewable energy still represents less than 40% of the average expenditure required each year between 2021 and 2030, according to IRENA’s 1.5°C scenario.
According to the report, investments are also not on track to achieve the goals set by the 2030 agenda for sustainable development.
“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 Francesco La Camera, IRENA Director-General.
He said the joint report underscores the need to direct public funds to regions and countries with a lot of untapped renewable potential but find it difficult to attract investment.
“International cooperation must aim at directing these funds to enable policy frameworks, the development of energy transition infrastructure, and to address persistent socio-economic gaps,” said La Camera.
In line with the 1.5°C Scenario, achieving an energy transition also requires the redirection of $0.7 trillion per year from fossil fuels to energy-transition-related technologies. But following a brief decline in 2020 due to COVID-19, fossil fuel investments are now on the rise.
“Some large multi-national banks have even increased their investments in fossil fuels at an average of about $0.75 trillion dollars a year since the Paris Agreement,” the report read.
Barbara Buchner, CPI’s Global Managing Director said that the path to net zero can only happen with a just and equitable energy transition.
“While our numbers show that there were record levels of investment for renewables last year, a greater scale-up is critically needed to avoid dangerous climate change, particularly in developing countries.”