Climate experts say we must triple our renewable energy levels and invest substantial monies to meet our net zero targets by mid-century. Is this doable?
Developed countries have most of the chits. However, Asia spearheads renewable energy growth; China leads the world, followed by the United States. Just as the international community united to combat the COVID pandemic, it must also collaborate to address the effects of climate change — a pursuit that requires sharing technologies, removing trade barriers, and making climate finance more accessible to developing countries.
“We are going to develop a new energy system. This is undeniable,” said Francesco La Camera, the director general of the International Renewable Energy Agency, at a global conference in the United Arab Emirates. “We have reached a tipping point. Now, it is about speed, scale and implementation. Not everything is going as it should be, but we will be successful.”
IRENA estimates that achieving the transition to renewable energy targets will require annual investments of $1.5 trillion through 2030. In 2022, global investment in energy transition technologies reached $1.3 trillion; the following year, it exceeded $2 trillion. One of the challenges is reducing financing costs and mobilizing capital for the Global South.
The compound annual growth rate between 2009 and 2024 was 8.5 percent when renewable energy rose from 1,140 gigawatts to 3,870 GW.
“At IRENA, we never state that we must eliminate all fossil fuels, but we do emphasize the need to phase them down to remain within the goal of keeping temperature rise below 1.5 degrees Celsius,” La Camera said.
Take the Dominican Republic, which is decreasing its reliance on fossil fuels and increasing its green energy use. It is necessary because oil and natural gas prices have risen dramatically. After all, emerging economies now must compete with the most developed nations for energy resources. To reach its 2030 goals, the country said it needs $5 billion to modernize its grid to make room for more renewables.
The United Arab Emirates updated its National Energy Strategy, which it formed in 2006, announcing last year that it would invest $54 billion by 2030 and $163 billion in clean energy by 2050. Masdar, the country’s clean energy mega-company, is active in 40 countries and announced the biggest solar-plus battery storage project worldwide. This plant promises to run all day, every day.
“We know the demand is there. We see the growth is coming,” said Ahmed Al Kaabi, assistant undersecretary for electricity, water and future energy in the UAE.
Under any circumstances, the key to success lies in climate finance. The World Bank, the Asian Development Bank, and the African Development Bank provide “concessional loans” for climate projects at super-low interest rates with more extended repayment periods.
Still, many commercial banks charge higher interest rates to developing countries because the perceived risk is more significant.
Consider Ghana: Although the national grid provides electricity to most of the country, 11 percent of its citizens still lack access to power. It plans to develop rooftop solar systems and mini-grids to address this issue. The government has indicated that private capital is available; however, funding tends to go to the most bankable projects — those with a reliable promise of repayment and reasonable returns.
Fiji generates 60 percent of its electricity from renewable sources, primarily hydropower, while the remaining 40 percent comes from fossil fuels, mainly diesel. The government’s 20-year National Development Plan aims to source all its electricity from renewable energy by 2030. As a small island nation, Fiji relies on wealthier countries to access the latest technology. The government emphasizes that concessional loans offer favorable interest rates and are key to achieving this goal.
“We must understand how safe these loans are,” said Harry Boyd-Carpenter, the managing director of Sustainable Infrastructure Group at the European Bank for Reconstruction and Development. “Developed countries can put their money to work. We must resolve tensions around trade. Green energy is the most significant wave of investment — trading globally. Every country must get something out of it.”
Wealthier nations have access to technology and capital to reduce emissions and modernize their economies. To triple renewable energy and achieve net zero by 2050, the Global South must have greater access to those resources.
