As the world marks the first official International Day on Clean Energy on January 26, 2024, it’s important to reflect on the pivotal commitments made recently by global leaders at COP28. Their pledge to expedite the deployment of renewables and enhance energy efficiency marks an incremental but important step towards realizing the collective objectives of the Paris Agreement. This commitment underscores the urgency of steering the world towards energy systems free of fossil fuels by mid-century at the latest.
To keep global warming well below 2°C and limit it to 1.5°C, experts from the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) advocate for a tripling of renewable energy capacity by 2030, equivalent to at least 11,000 GW. Additionally, it is vital to double the global average annual rate of energy efficiency improvements from around 2% to over 4% annually until 2030.
The transformation of global energy systems holds the potential to create new jobs, enhance lives, and empower people and communities. This is integral to achieving UN SDG 7 for “affordable, reliable, sustainable, and modern energy for all,” addressing the needs of nearly 800 million people globally without access to electricity.
Looking ahead, nations are poised to leverage a diversified portfolio of technologies to decarbonize the energy sector. This includes renewables, energy efficiency, and other zero-emission technologies. Nations have showcased commendable progress aligned with their Nationally Determined Contributions (NDCs) and carbon neutrality commitments, demonstrating a global commitment to a sustainable future.
Acknowledging the importance of this decade for renewables and energy efficiency, accelerated action and ambitious policy implementation are vital to addressing energy security and affordability challenges. However, the current financial pledges fall far short of the trillions of dollars required, highlighting the urgency for a robust global rethink.
A transformative journey towards clean energy that is also just, requires a robust set of policy measures, which enhance global framework conditions and elevate market readiness. Key aspects include facilitating technology transfer, mitigating protectionist practices, upholding rules-based international trade principles, and optimizing processes related to permitting and public procurement for clean energy technologies and projects.
Collaboration is also essential, both between states, but also between states and a wide range of stakeholders. Promoting international partnerships, knowledge-sharing initiatives, and advocating for research and development investments will accelerate the global adoption of clean energy solutions. Additionally, creating incentives for innovation and emphasizing inclusivity, ensuring active participation from marginalized communities, contribute to a more equitable and sustainable future. By integrating these elements into policy, we can build a resilient foundation for a just and successful clean energy transition.
As for financing, a more agile and intelligent approach to climate finance is essential for unlocking a just and seamless transition to clean energy. The pace and scale of climate financing will need to be unprecedented to transition from billions to trillions. Simply put, this requires higher commitments from the Global North. Deploying innovative market-based financial and de-risking instruments, streamlining due diligence and investment approval processes, and providing technical assistance and capacity-building support. This should expedite access to climate finance, enhance the pipeline of bankable projects, and empower nations to achieve their climate mitigation goals.
Furthermore, channeling funds through green funds into catalytic clean energy programs in the Global South will be instrumental in achieving broader sustainability objectives. Embracing innovative, market-based financial mechanisms and business models is imperative to cultivate a robust portfolio of bankable projects, de-risk investments, and attract private sector funding at scale.
Additionally, supplementing these efforts with additional funds from compliance carbon markets and voluntary carbon markets will further augment financial support for clean energy initiatives. This multifaceted approach ensures that financing mechanisms align with the urgency and magnitude of the global clean energy transition, fostering a sustainable and equitable future.
On this International Clean Energy Day, we stand at a crossroads, acknowledging the progress made at COP28 and the monumental task ahead. As repeatedly made clear by leaders across the globe, the urgency to expedite the deployment of renewables and enhance energy efficiency cannot be overstated. However, our current financial commitments fall far short of the mark. So, as we celebrate the progress made, let this be a call to action — a commitment to mobilize the trillions required, leveraging agile climate finance and channeling funds strategically to achieve a sustainable and equitable energy future. The path forward demands unprecedented commitment, but through collective resolve, we can usher in an era where clean energy is more accessible, affordable, reliable, and sustainable, especially for countries in the Global South.
– Aurélien Pillet – Climate & Innovative Finance Lead, Globesightread more