Today’s Energy Crisis Points to a Brighter Future for Renewables

Russia’s invasion of Ukraine has caused a horrific human tragedy in Eastern Europe and no shortage of misery abroad. The war provoked an energy crisis that has led to skyrocketing power costs for European families and businesses, inflation across the globe, and a rise in poverty worldwide. While some nations including the U.S. and U.K. are now reacting by pulling out the stops to extract more fossil fuels, there’s a counterintuitive trend going on: Across the world, investments in renewables are on the upswing.

The result could be a boom in clean energy by the end of the decade, according to a report the International Energy Agency (IEA) released late last week.

Let’s set the context. The IEA pointed out that since 2015, global investments in renewables have either increased year-to-year or, at a minimum, flatlined. Such has been the worldwide trajectory despite the relentless influence of the fossil fuel industry, the dismissive attitude toward renewables on behalf of many policymakers and massive shocks such as the COVID-19 pandemic. Further, recent policy shifts such as the U.S. Inflation Reduction Act, Japan’s Green Transformation (GX) program and the European Union’s climate crisis package all pave the way for more deployment of renewables. China, India and South Korea have also launched policies that will boost spending on renewables and other cleaner forms of energy this decade as well.

If all goes to plan, spending on clean energy investments worldwide could reach $2 trillion by 2030, a 50 percent increase from current spending. 

Further, global consumptions of fossil fuels could peak in 2025 at 37 gigatons, decreasing slightly annually through 2025. 

Granted, this surge may not be enough to avert all chaos that could come with climate change. The IEA tempers its latest round of news with an assessment that global investments in renewables would have to tally up to $4 billion by 2030 if the world will be able to reach net-zero emissions by 2050. Then again, the news isn’t as dire as believed a few short years ago.

“While 5 degrees of warming once seemed possible, scientists now estimate that the Earth is on track to warm by 2 to 3 degrees. That difference might not seem huge, but it translates to fewer record-breaking floods, storms, droughts and heat waves and potentially thousands or millions of lives saved in the coming decades,” German Lopez wrote in a New York Times newsletter sent to subscribers on Oct. 27.

Of course, “fewer” catastrophic climate change-related events is relative, especially for lower-income nations. The fact that the world’s richest nations have not yet followed through on their 2009 commitments to fund climate change mitigation and adaptation projects for poor nations lies behind what could be contentious COP27 meetings this month. Finance ministers from the “V20,” i.e. the nations that are most vulnerable to climate change risks, have floated the idea of not paying off their debt obligations if the nations that have contributed to climate change the most don’t start paying for climate adaptation.

The IEA’s numbers reinforce the case that it behooves the world’s wealthiest countries to launch and fund those programs if they are serious about limiting climate change’s impacts on poorer citizens. Though the current high prices of conventional energy may turn out to be a short-term shock, the outcome could generate more emissions in the long run. For example, the IEA concludes that  as many as 75 million people globally who recently gained access to electricity will soon no longer be able to afford it due to rising costs. In addition, about 100 million people could return to using conventional biomass sources for cooking — hence another kneecapping for the plan to reduce global warming to 1.5 degrees Celsius by mid-century.

“The environmental case for clean energy needed no reinforcement, but the economic arguments in favor of cost-competitive and affordable clean technologies are now stronger – and so too is the energy security case,” the IEA concluded. “The journey to a more secure and sustainable energy system may not be a smooth one. But today’s crisis makes it crystal clear why we need to press ahead.”

Image credit: Alexander Schimmeck via Unsplash