Investments in clean energy technologies are racing ahead of their fossil fuel counterparts in a sign that the world could hit emissions reductions targets to reverse track on global warming.
That's the word from the International Energy Agency, the global body that tracks energy spending around the world.
About $2.8 trillion is set to be invested globally in energy with $1.7 trillion expected to go to clean energy tech, according to the IEA. That eye-popping number includes renewable energy, electric vehicles, nuclear power, energy grid and transmission tech, storage, low-emission fuels, energy efficiency and heat pumps.
The annual spending on clean energy investment is expected to rise by 24%, according to the IEA, with much of that money going to renewable power and electric vehicles.
“Clean energy is moving fast – faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA Executive Director Faith Birol. “For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.”
New investments in renewable energy -- particularly solar power -- are driving the shift in energy production, Birol said. In fact, low-emissions electricity generation account for 90% of new investments in power generation.
“For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy," said Birol in a statement. "Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.”
However, amid all the good news, it's clear that one gap remains. The bulk of the spending on renewable energy is coming from and flowing to advanced economies like the U.S., European Union members, and China.
Brazil and India are spending as well -- and India could soon become a leader in renewables and sustainable agriculture (according to two different reports from the consulting firm, McKinsey) -- but for many developing economies bad policy and a lack of viable financing options may put renewable development out of reach.
The International Energy Agency stressed that more needs to be done by the global community to support development in these economies.