The work of the International Energy Agency (IEA) has made it crystal clear that countries around the world must urgently accelerate their transitions to clean energy. This is critical to stave off the worst effects of climate change – and to build a more healthy, prosperous and secure future where everyone has access to clean and affordable energy supplies. Our recent landmark report, Net-Zero by 2050: A Roadmap for the Global Energy Sector, set out a narrow but achievable pathway towards such a future.
However, countries are not starting on the journey from the same place – and the damaging effects of the Covid-19 crisis are lasting longer in many parts of the developing world: the economic slump is deeper, and the capacity to drive a sustainable recovery is limited. If energy transitions and clean energy investment do not quickly pick up speed in emerging and developing economies, the world will face a major fault line in efforts to address climate change and reach other sustainable development goals. This is because the bulk of the growth in global emissions in the coming decades is set to come from emerging and developing economies as they grow, industrialise and urbanise.
There is a huge opportunity to take advantage of lower-cost clean energy technologies, led by solar and wind, to forge a new low-emissions development model for the developing world. There is also no shortage of capital globally to realise such a vision. However, this capital is not finding its way to the countries and sectors where it is most needed. Many institutions are supporting energy transitions in developing countries, with good intentions and often impressive results. But private capital does not yet see the right balance of risk and reward in clean energy projects. Fostering the financial conditions for a rapid deployment of clean energy technologies in emerging and developing economies is one of the defining challenges of our times.
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