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IRENA says renewable energy boosts GDP

Governments could use energy transformations to create jobs, meet climate targets and produce GDP gains of US$98 trillion by 2050, according to a new report.

Governments could use energy transformations to create jobs, meet climate targets and produce cumulative global GDP gains of US$98 trillion above the usual scenarios by 2050, according to a new report on Monday.

The International Renewable Energy Agency's inaugural annual Global Renewables Outlook said nations could fully decarbonize by mid-century, in ways that revitalize their economies hit hard by the coronavirus pandemic, if they use their COVID-19 stimulus packages to promote clean energy technologies.

The analysis by IRENA was intended to offer governments a path towards accomplishing the climate goals of the 2015 Paris Agreement while also boosting economic growth above business-as-usual scenarios. The Abu Dhabi-based intergovernmental organization works to advance renewables such as solar, hydro, wind, geothermal and biomass.

It said stimulus packages could lead to a "green recovery" by prioritizing renewable energy sources that improve the environment. Doing so would nearly quadruple renewable energy jobs to 42 million, it said, expand employment in energy efficiency to 21 million jobs and add 15 million more jobs in the creation of more flexible power systems.

"The priority now remains to save as many lives as possible, bring the health emergency under control and alleviate hardship," IRENA's Director-General Francesco La Camera said in a foreword to the 292-page report. "At the same time, governments are embarking on the monumental task of devising stimulus and recovery packages. These are at a scale to shape societies and economies for years to come."

"Economic recovery packages must serve to accelerate a just transition," he continued. "The European Green Deal, to take an existing example, shows how energy investments could align with global climate goals. The time has come to invest trillions, not into fossil fuels, but into sustainable energy infrastructure."

Broad array of options

Among the report's key findings are that transitioning to renewable energy sources would produce stable, long-term economic development, bringing more jobs, higher economic growth, cleaner living conditions and significantly improved welfare.

The could be accomplished, the report said, through a variety of options such as consumer tax credits for home solar panels and reshaped, more interconnected national power grids.

"This ambitious outlook would also cut 70% of the world’s energy-related carbon dioxide emissions by 2050," it said. "Over 90% of this reduction would be achieved through renewables and energy efficiency measures."

Another key finding is that the energy transition can drive broad socioeconomic development, like that proposed in the European Green Deal. The European Union’s executive body launched ambitious plans in December to create “the first climate-neutral continent by 2050,” a blueprint to sustainably overhaul trade, industry and politics.

However, Michael Shellenberger, an American environmental policy writer, has argued renewable energy sources offer an unrealistic model. He wrote in a Forbes article last year the problem is seen in Germany's efforts to get renewables to "cheaply power" its economy.

"But no amount of marketing could change the poor physics of resource-intensive and land-intensive renewables," Shellenberger wrote. "Solar farms take 450 times more land than nuclear plants, and wind farms take 700 times more land than natural gas wells, to produce the same amount of energy."

IRENA reported that zero CO2 emissions might be achieved beyond 2050 through hydrogen and synthetic fuels, direct electrification and advanced biofuels. That would take energy investments of up to US$130 trillion, it said, but the benefits would outweigh the costs.

At present, the world is expected to invest US$95 trillion in clean energy. That will leave CO2 emissions largely unchanged and fall short of the Paris Agreement targets, IRENA reported.

The 2015 treaty committed the world to “holding the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees C. above pre-industrial levels.”

The world has already warmed by about 1 degree C. above pre-industrial levels, so the choice is really between another 1 degree C. or, preferably, a half-degree C. more warming.

The report also examined energy transition paths in 10 regions worldwide. All will have higher shares of renewable energy, IRENA found, with Southeast Asia, Latin America, the European Union and most of Africa poised to reach 70-80% by 2050.