To meet the goal set by the Paris agreement — limiting the global temperature rise to 2 degrees Celsius — roughly $40 trillion (U.S.) must be invested in environmental solutions before 2030.
That amount, according to the International Energy Agency, will be necessary to pay for research and development of new technologies and for wider deployment of technology already available.
The good news is that investment in renewable energy has been increasing, according to a new report, Global Trends in Renewable Energy Investment 2015. The graphs below show how much, and where.
Who will pay?
National, state and local governments worldwide, often acting in partnership with businesses, will pay to bring existing clean-energy tools — solar photovoltaic panels, wind turbines and storage batteries — into action. Foundations, universities, pension funds and venture capitalists will help.
How will money be spent?
Proven clean-energy technologies need wider adoption, so as countries begin to sign the Paris agreement this Earth Day (April 22), their first actions will be to update old systems — install smart meters to more efficiently monitor power consumption, for example — and next install new power generation and distribution technologies.
Recent spending patterns will hold true: Solar energy is picking up momentum, especially in emerging markets. Brazil stepped up its stake in renewable energy by $7.6 billion in 2014, with India not far behind at $7.4 billion. Wind and geothermal are gaining ground. Where water is abundant, hydropower will increase.
Cities everywhere, from Los Angeles to New Delhi to Beijing, want more investment in electric vehicles, in order to reduce air pollution. Expect more research and development in larger-capacity storage batteries to improve electric vehicles (and to allow fuller use of wind and solar energy).
Improved carbon capture and storage to reduce the impact of fossil fuel consumption will also demand immediate — and long-term — investment. Finally, intensified exploration of low-emissions biomass, wave energy, fuel cells and biofuels is likely.
If the past is prologue to the future, take a look at the steps forward taken by developing countries, led by China, in 2014. China came within just a few billion dollars of overtaking investment in developed economies. It set records for financing solar power, while European investments in offshore wind power also broke records.
If global trends continue, the coming decade will see research, testing and deployment of smarter tech happening worldwide.