Wind and coal turbines photographed in Maryland, USA.
Chip Somodevilla | Getty Images News | Getty Images
Global investment in energy is set to reach nearly $2.8 trillion in 2023, according to a new report from the International Energy Agency, with more than $1.7 trillion going towards clean energy technologies such as electric vehicles, renewables and storage.
While advocates of a transition to a sustainable future will welcome the latest figure, they will likely be frustrated by the International Energy Agency’s projection that coal, gas and oil are still on track to attract “just over” $1 trillion in investment this year.
“Investment spending in fossil fuels today is now more than double the levels required in the net-zero emissions scenario by 2050,” said the International Energy Agency’s 2023 Global Energy Investment Report.
“The imbalance for coal is particularly striking: today’s investments are nearly six times the 2030 requirements for the New Zealand scenario,” she added.
The impact of fossil fuels on the environment is significant. The United Nations says that since the 19th century, human activities have been the main driver of climate change, mainly due to the burning of fossil fuels such as coal, oil and gas.
The shadow of the 2015 Paris Agreement looms large over the IEA report. The landmark agreement aims to “limit global warming to less than 2, and preferably 1.5 degrees Celsius, compared to pre-industrial levels.”
Reducing man-made carbon dioxide emissions to net zero by 2050 is seen as critical when it comes to achieving the 1.5°C target.
Main discussion
Over the past few years, prominent figures such as United Nations Secretary-General António Guterres have expressed their feelings about fossil fuels.
In June last year, Guterres criticized new funding for fossil fuel exploration. He called it “delusional” and called for the abandonment of fossil fuel financing.
Despite these concerns, the oil and gas industry continues to develop projects around the world.
In October 2022, for example, BP Chairman Bernard Looney said his company’s strategy centers around investing in hydrocarbons while investing money in the planned energy transition.
Change is coming?
While there will be concerns about money flowing into fossil fuels, Fatih Birol, executive director of the International Energy Agency, sought to highlight what could be a major shift ahead.
“Clean energy is moving fast – faster than many people realise,” he said in a statement released alongside the IEA report. “This is evident in investment trends, as clean technologies backtrack from fossil fuels.”
“For every dollar invested in fossil fuels, about $1.7 now goes to clean energy,” Birol added, explaining that that ratio was one to one just five years ago.
“One shining example is investment in solar energy, which is set to exceed the amount of investment that goes into oil production for the first time.”
