Washington, DC– The World Energy Outlook report released this week by the International Energy Agency highlights the urgent need for wealthy nations to accelerate their investments in clean energy in order to meet goals of net zero emissions by 2050. The report highlights key investment strategies and tools, many of which are already being deployed by green banks across the country, that are much needed to ensure an expeditious and equitable transition to clean energy.
According to the report, to get the world on track for net zero by 2050 by the end of the decade, annual global clean energy investment must quadruple from last year’s investment level by 2030, growing from $1T to $4T annually. The public sector contribution of this will similarly have to increase from $300B to $1.2B
The summary reads:
“Achieving rapid clean energy transitions depends on enhancing access to low cost finance for clean energy projects. This means channelling retained earnings from the balance sheets of large energy companies, as well as opening funding from a range of companies and external sources – notably banks and the enormous pools of capital in financial markets. We estimate that around 70% of clean energy investment will need to be carried out by private developers, consumers and financiers responding to market signals and policies set by governments. But an expansion of public sources of finance is also required. Public actors, including state-owned enterprises (SOEs), often have a key part to play in funding network infrastructure and clean energy transitions in emissions-intensive sectors. Public finance institutions will need to catalyse private capital, and their role is especially important in the NZE, where their investment more than doubles compared with the APS.”
“Experts continue to point to key features of the Clean Energy and Sustainability Accelerator as vital functions for financing our transition to clean energy,” said Reed Hundt, CEO of the Coalition for Green Capital. “With $7 billion generated in clean energy investments over the last decade, the green bank model is a proven method for providing local solutions for local problems.”
Over the last decade, the 23 green banks that exist today have generated $7 billion in clean energy investment, with $1.5 billion of this investment taking place in 2019 alone. This summer, the New York Green Bank closed a $314 million private capital raise with Bank of America, the largest ever by a green bank in the U.S. Elsewhere, green banks have funded community solar and energy efficiency projects for frontline communities and low-income residents.