Wind turbines and coal photographed in Maryland, USA.
Chip Somod Villa | Getty Images News | Getty Images
According to a new report by the International Energy Agency, global energy investment is expected to reach about $2.8 trillion in 2023, of which more than $1.7 trillion will be spent on clean energy technologies such as electric vehicles, renewable energy and energy storage.
While advocates of the transition to a sustainable future will welcome the latter figure, they may be dismayed by the IEA’s forecast that coal, gas and oil are still on track to attract “just over” $1 trillion in investment this year.
“Today’s fossil fuel investment spending is now more than double the level required in a 2050 net-zero emissions scenario,” said the IEA’s 2023 World Energy Investment Report.
“The dislocation of coal is particularly striking: today’s investment is almost six times what the NZE scenario requires in 2030,” it added.
The environmental impact of fossil fuels is enormous. Since the 19th century, “human activity has been the main driver of climate change, mainly due to the burning of fossil fuels such as coal, oil and natural gas,” the UN said.
The shadow of the 2015 Paris Agreement hangs over the IEA report. The landmark agreement aims to “limit global warming to well below pre-industrial levels to 2 degrees Celsius, preferably 1.5 degrees Celsius”.
Reducing anthropogenic carbon dioxide emissions to net zero by 2050 is seen as key to achieving the 1.5°C target.
Over the past few years, prominent figures such as UN Secretary-General Antonio Guterres have expressed their views on fossil fuels.
Last June, Guterres slam new funding for fossil fuel exploration. He described it as “delusional” and called for an abandonment of fossil fuel financing.
Despite these concerns, the oil and gas industry continues to develop projects around the world.
For example, in October 2022, bp CEO Bernard Looney says his company’s strategy revolves around invest in hydrocarbons At the same time invest money in the planned energy transition.
Change is coming?
Despite concerns about money flowing to fossil fuels, IEA executive director Fatih Birol sought to highlight the potential for a major shift ahead.
“Clean energy is moving fast – faster than many realize,” he said in a statement released alongside the IEA report. “This is evident in investment trends, clean technology is moving away from fossil fuels.”
“For every dollar invested in fossil fuels, roughly $1.70 is now spent on clean energy,” Birol added, explaining that five years ago the ratio was one-to-one.
“A shining example is investment in solar energy, which will exceed investment in oil production for the first time.”