Developing countries need sevenfold rise in clean energy spend: IEA

Cutting greenhouse gas emissions from the global energy sector to net zero and limiting global average temperature rises to 1.5°C remain possible due to the record growth of clean energy technologies, but will require a threefold rise in energy investment, the International Energy Agency (IEA) said in a new report released Tuesday.

The IEA’s Net Zero Roadmap has been released in the run-up to UN climate talks that will be tasked with taking steps that can help free up hundreds of billions of dollars of finance for lower carbon technologies, enable fully functional international carbon markets under the Paris Agreement´s Article 6, and spur much deeper cuts in emissions.

The Paris-based agency said a 2023 update to a 2021 report takes heed of changes to the global energy landscape in the past two years - including ‘extraordinary growth’ in some clean energy technologies - but also rising investment in fossil fuels amid high prices and stubbornly high emissions.

“Staying on track means almost all countries must move forward their targeted net zero dates. It also hinges on mobilising a significant increase in investment, especially in emerging and developing economies,” the IEA said in a statement accompanying the report.

The IEA said that to keep emissions within 1.5C - the threshold beyond which a UN scientific panel says global warming would likely be catastrophic - global output of greenhouse gases by 2035 needs to shrink by 80% in advanced economies and 60% in emerging market or developing economies compared with the 2022 levels.

The IEA said the biggest jump in clean energy investment is needed in emerging markets and developing economies (other than China), where it would need to surge sevenfold by the early 2030s in the scenario that countries deliver on commitments to reach net zero.

“This will require stronger domestic policies together with enhanced and more effective international support,” the IEA said, adding that annual funding for clean energy in emerging market and developing economies will need to reach around $80-100 billion by the early 2030s.

That assertion is likely to be of major interest to countries that aim to attract finance for projects that would be eligible for Article 6, which if fully enabled is thought likely to dwarf the current voluntary carbon market.

The report said that carbon capture and storage technologies, which would include bioenergy such as biochar and direct air capture, could account for of 8% of global emissions reductions in a net-zero scenario.

But for all already-announced CO2 capture capacity to be realised and global capacity to reach net-zero scenario levels by 2030, project lead times would need to be slashed, particularly related to the development of CO2 storage, the report said.