Global trends in sustainable energy investment 2008

Jul 2008

The 2008 edition of Global Trends shows that investment flows have not only continued to grow – more than 60% compared to 2006 – they have broadened and diversified, giving the sustainable energy sector greater breadth, depth and scale. The only sector that has taken a downturn is biofuels amid rising concerns of feedstock availability, price and environmental sustainability.
The record overall investment, however, comes despite the recent ‘credit crunch’ and is a true cause for hope that rising concerns over climate change and energy prices are leading to a fundamental change in the way we produce and use energy. These figures show that the finance sector’s forward view may be better at seeing the “disruptive change” of new technology.
Energy analysts that look backward see that renewable energy “only” supplies 5% of global energy. Renewable energy, however, accounted for 9.4% of global energy investment and for 23% of new electricity generating capacity in 2007. Investment levels are on track to reach $450 billion a year by 2012 and $600 billion a year in 2020.
In terms of climate change, the numbers in Global Trends point to the most cost-effective solutions if carbon emissions are to be reduced in time to avoid the most dangerous climate change scenarios. The twin thrusts from renewable energy and improved energy efficiency can be the sustainable energy engine of a global economy without dangerous carbon emissions.
Rather than waiting for new technology to clean up the current energy infrastructure, the job can be done now from existing solar, wind, geothermal and other currently commercial technologies. Investment flows into sustainable energy have recently increased by more than $100 billion. This is a positive signal that the investment sector will be able to raise the $200-210 billion per year the UNFCCC Secretariat says is needed to return global GHG emissions to current levels.
The message from the report is one of confidence, confidence that deep and meaningful emissions reductions are achievable if the clean energy markets are given the oxygen to evolve.

By: United Nations Environment Programme (UNEP), New Energy Finance Ltd.

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