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A decade of renewable energy investment, led by solar, tops USD 2.5 trillion

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Global investment in new renewable energy capacity over this decade — 2010 to 2019 inclusive — is on course to hit USD 2.6 trillion, with more gigawatts of solar power capacity installed than any other generation technology, according to new figures published today.

According to the Global Trends in Renewable Energy Investment 2019 report, released ahead of the UN Global Climate Action Summit, this investment is set to have roughly quadrupled renewable energy capacity (excluding large hydro) from 414 GW at the end of 2009 to just over 1,650 GW when the decade closes at the end of this year.

Solar power will have drawn half — USD 1.3 trillion — of the USD 2.6 trillion in renewable energy capacity investments made over the decade. Solar alone will have grown from 25 GW at the beginning of 2010 to an expected 663 GW by the close of 2019 — enough to produce all the electricity needed each year by about 100 million average homes in the USA.

The global share of electricity generation accounted for by renewables reached 12.9 per cent, in 2018, up from 11.6 per cent in 2017. This avoided an estimated 2 billion tonnes of carbon dioxide emissions last year alone — a substantial saving given global power sector emissions of 13.7 billion tonnes in 2018.

Including all major generating technologies (fossil and zero-carbon), the decade is set to see a net 2,366 GW of power capacity installed, with solar accounting for the largest single share (638 GW), coal second (529 GW), and wind and gas in third and fourth places (487 GW and 438 GW respectively).

The cost-competitiveness of renewables has also risen dramatically over the decade. The levelized cost of electricity (a measure that allows comparison of different methods of electricity generation on a consistent basis) is down 81 per cent for solar photovoltaics since 2009; that for onshore wind is down 46 per cent.

“But we cannot afford to be complacent. Global power sector emissions have risen about 10 per cent over this period. It is clear that we need to rapidly step up the pace of the global switch to renewables if we are to meet international climate and development goals.”

2018 sees quarter-trillion dollar mark exceeded again

The report, released annually since 2007, also continued its traditional look at yearly figures, with global investment in renewables capacity hitting USD 272.9 billion in 2018.

While this was 12 per cent down over the previous year, 2018 was the ninth successive year in which capacity investment exceeded USD 200 billion and the fifth successive year above USD 250 billion. It was also was about three times the global investment in coal and gas-fired generation capacity combined.

The 2018 figure was achieved despite continuing falls in the capital cost of solar and wind projects, and despite a policy change that hit investment in China in the second half of the year.

A record 167 GW of new renewable energy capacity was completed in 2018, up from 160 GW in 2017.

Jon Moore, Chief Executive of BloombergNEF (BNEF), the research company that provides the data and analysis for the Global Trends report, commented: “Sharp falls in the cost of electricity from wind and solar over recent years have transformed the choice facing policy-makers. These technologies were always low-carbon and relatively quick to build. Now, in many countries around the world, either wind or solar is the cheapest option for electricity generation.”

The report also tracks other, non-capacity investment in renewables — money going into technology and specialist companies. All of these types of investment showed increases in 2018. Government and corporate research and development was up 10 per cent at USD 13.1 billion, while equity raised by renewable energy companies on public markets was 6 per cent higher at USD 6 billion, and venture capital and private equity investment was up 35 per cent at USD 2 billion.

Overall renewable energy investment, including these categories as well as capacity investment, reached USD 288.3 billion in 2018, down 11 per cent on the record figure of USD 325 billion attained in 2017.

“The technologies to use wind, sun or geothermal energy are available, they are competitive and clean. Within 10 years Germany will produce two-thirds of its power based on renewables. We are demonstrating that an industrial country can phase out coal and, at the same time, nuclear energy without putting its economy at risk” said Svenja Schulze, Germany’s Federal Minister for the Environment, Nature Conservation and Nuclear Safety.

“We know that renewables make sense for the climate and for the economy. Yet we are not investing nearly enough to decarbonize power production, transport and heat in time to limit global warming to 2C or ideally 1.5C. If we want to achieve a safe and sustainable future, we need to do a lot more now in terms of creating an enabling-regulatory environment and infrastructure that encourage investment in renewables.”

“It is important to see renewables becoming first choice in many places,” said Nils Stieglitz, President of Frankfurt School of Finance and Management. “But now we need to think beyond scaling-up renewables. Divesting from coal is just one issue within the broader field of sustainable finance. Investors increasingly care whether what they do makes sense in the context of a low-carbon and sustainable future.”

China still leads, but renewables investment spreads

China has been by far the biggest investor in renewables capacity over this decade, having committed USD 758 billion between 2010 and the first half of 2019, with the U.S. second on USD 356 billion and Japan third on USD 202 billion.

Europe as a whole invested USD 698 billion in renewables capacity over the same period, with Germany contributing the most at USD 179 billion, and the United Kingdom USD 122 billion.

While China remained the largest single investor in 2018 (at USD 88.5 billion, down 38 per cent), renewable energy capacity investment was more spread out across the globe than ever last year, with 29 countries each investing more than USD 1 billion, up from 25 in 2017 and 21 in 2016.

The Global Trends in Renewable Energy Investment report is commissioned by the UN Environment Programme in cooperation with Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance and produced in collaboration with BloombergNEF. The report is supported by the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety.

UN Environment

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Health, Jobs and Environment Top Personal Risk List

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A new World Economic Forum/Ipsos survey found most adults are optimistic about accessing technology, digital tools and training in the next 12 months, but have serious concerns about the state of the climate, job market and global health. These findings ahead of the Davos Agenda week highlight the importance of leaders across the public and private sectors coming together to address the changes needed in a crucial year ahead.

According to the survey, the percentage of those expecting the availability of digital tools and technology to improve in 2021 exceeds the percentage of those who think it will get worse across geographies. This is most of all the case in Saudi Arabia (by 57 points), Peru (55 points), and India (48 points). Italy is the only country where, while the proportion of optimists is greater than that of pessimists by 3 points, the difference is not statistically significant.

Significantly larger proportions of people expect opportunities for training and education to improve in 2021 than to get worse in 12 countries — most of all in Saudi Arabia (by 45 points), Peru (44 points), Mexico (36 points), and China (36 points).

Image: IPSOS/World Economic Forum

However, there are global concerns with deteriorating health, loss of income or employment, and more frequent weather-related natural disasters – each perceived as a real threat by three out of five adults across the world.

Pessimists outnumber optimists on the other five issues measured: The pace of climate change (by 20 points); Employment opportunities (by 15 points); General health conditions (by 5 points); Inequality (by 4 points), and Relations between one’s country and other countries (by 2 points).

Expected Change in 2021 Image: IPSOS/World Economic Forum

The pandemic has accelerated systemic changes that were apparent before its inception. The fault lines that emerged in 2020 now appear as critical crossroads in 2021. The Davos Agenda will help leaders choose innovative and bold solutions to stem the pandemic and drive a robust recovery over the next year.

In regards to the Davos Agenda, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum said: “In the context of the COVID-19 pandemic, the need to reset priorities and the urgency to reform systems have been growing stronger around the world. Rebuilding trust and increasing global cooperation are crucial to fostering innovative and bold solutions to stem the pandemic and drive a robust recovery. This unique meeting will be an opportunity for leaders to outline their vision and address the most important issues of our time, such as the need to accelerate job creation and to protect the environment.”

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Key Trends Shaping the Global Economy in 2021

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Accelerating inequality, remote work and greater tech market dominance are among the pandemic’s emerging trends that are likely here to stay for some years. Beyond managing the pandemic and vaccine rollout, these trends could shape a new era of fiscal, monetary and competition policy, as well as bigger government. Deglobalization is seen as the least likely of current trends to continue in the longer term; particularly as international coordination is key to resolving global challenges such as vaccine manufacturing and distribution. These are some of the findings of the World Economic Forum’s Chief Economists Outlook, published today.

The latest edition of the Forum’s Chief Economists Outlook is the outcome of consultations with leading chief economists from the public and private sectors. The report outlines the global economic outlook and lays out the priorities for policy-makers and business leaders to chart a post-pandemic recovery agenda that is fair, inclusive and sustainable.

Chief economists are impressed at the speed and scale of fiscal policy measures taken in the wake of the pandemic. However, as the global vaccination campaign picks up pace, they see the second half of 2021 as the optimal time to begin transitioning from general emergency spending to more targeted spending on future growth sectors. A majority suggest that taking action to pay down the significant national debts accumulated in the past year can wait until 2024 or beyond.

With central bank financing of public debt through quantitative easing now at the core of monetary policy in response to the crisis, chief economists believe this could lead to less central bank independence over time. Many also suggested that central banks should be pursuing environmental objectives directly through their asset purchases, which would represent a significant departure from past practice.

Most chief economists expect a brighter outlook as the vaccine helps accelerate the recovery, and as a new US administration contributes to tackling short-and long-term challenges, both domestically and globally, through revived multilateral institutions. However, most of those surveyed see virus mutations as the biggest risk for 2021, slowing efforts to contain the pandemic and leading to new lockdowns. Another concern relates to poorly calibrated policy responses that risk failing to differentiate between the deep structural impact of the pandemic on some sectors and the temporary halting of activity in other sectors.

“This report makes clear that precisely calibrated and coordinated fiscal, monetary and competition policy hold the key to global economic recovery and transformation. As the roll-out of vaccines picks up pace, there won’t be a better time for governments to work together and invest in a fair transition to a greener, more inclusive economy,” says Saadia Zahidi, Manging Director at the World Economic Forum.

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Investment in Upskilling Could Boost Global GDP by $6.5 trillion by 2030

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Accelerated investment in upskilling and reskilling of workers could add at least $6.5 trillion to global GDP, create 5.3 million (net) new jobs by 2030 and help develop more inclusive and sustainable economies worldwide. These are the key findings of a World Economic Forum report published today.

The report, Upskilling for Shared Prosperity, authored in collaboration with PwC, finds that accelerated skills enhancement would ensure that people have the experience and skills needed for the jobs created by the Fourth Industrial Revolution – boosting global productivity by 3%, on average, by 2030. The newly created jobs will be those that are complemented and augmented – rather than replaced – by technology.

“Even before COVID-19, the rise of automation and digitization was transforming global job markets, resulting in the very urgent need for large-scale upskilling and reskilling. Now, this need has become even more important. And – as we highlight in our new insight report with the Forum – upskilling is key to stimulating the economic recovery from COVID-19 and creating more inclusive and sustainable economies. To make this happen, greater public-private collaboration will be key. We’re delighted to be part of the Reskilling Revolution platform, which will help foster greater action, collaboration, accountability and progress on this important topic,” said Bob Moritz, Global Chairman, PwC.

One year of impact through the Reskilling Revolution

The research on upskilling supports the work of the Reskilling Revolution platform. Launched at the World Economic Forum Annual Meeting in Davos-Klosters in January 2020, the Reskilling Revolution set out to provide better education, skills and work to one billion people by 2030. In its first year, despite the pandemic and economic downturn, the platform’s initiatives are estimated to have benefitted more than 50 million people globally through rapid reskilling, upskilling and redeployment.

“Millions of jobs have been lost through the pandemic, while accelerating automation and digitization mean that many are unlikely to return. We need new investments in the jobs of tomorrow, the skills people need for moving into these new roles and education systems that prepare young people for the new economy and society. Initiatives like the Reskilling Revolution hold the key to converting ideas into action and creating the necessary coordination between the public and the private sectors. There is no time to waste,” said Saadia Zahidi, Managing Director, World Economic Forum.

After focusing in 2020 on setting up systems for rapid reskilling and upskilling – particularly vital in the midst of the pandemic – the initiative will continue to scale up its skilling work in its second year, while expanding its work in education, job creating investments and work standards.

“Investment in job creation, particularly climate-friendly jobs, is key to ensuring a Reskilling Revolution, and concerted action by governments and by business is needed urgently,” said Sharan Burrow, General-Secretary, International Trade Union Confederation (ITUC).

Developing a common language for skills

The absence of a shared language for skills poses a significant obstacle for the reskilling and upskilling agenda. An additional report by the World Economic Forum, also launched today, provides a common taxonomy for skills to help employers, government and learning providers more efficiently match talent to jobs and learning opportunities.

The Global Skills Taxonomy: A Common Language to Unlock the Reskilling Revolution includes specific definitions and categorizations of skills, creating a common taxonomy for the labour market to adopt, from online training providers and universities to hiring managers in companies and education ministries. It consists of an interactive taxonomy with definitions as well as recommendations for adoption to inform hiring, reskilling and redeployment practices in the workplaces of the future.

More about the Reskilling Revolution

The Reskilling Revolution works through three action tracks: Forum-led initiatives that engage the public and the private sectors in joint initiatives; public-sector and multistakeholder initiatives; and company-led initiatives.

The Closing the Skills Gap country accelerators are developing and implementing national strategies for reskilling and upskilling. Accelerators are active in 10 countries with Georgia, Greece and Turkey having recently established accelerators, and a further six accelerators under discussion. Commitments made by established and planned accelerator countries and their member companies to reskill and upskill their employees are expected to reach up to 47 million individuals.

Comprised of major online learning providers, including Udacity and Coursera, and reaching 200 million learners worldwide, the Forum-led Skills Consortium aims to elevate online learning as an accepted route to employment to provide more opportunities for reskilling, upskilling and redeployment. Building on this success, the Chief Learning Officer Community brings together industry leaders in learning and development to transform workplace learning for 2.9 million employees.

In the year ahead, the Consortium, the community of Chief Human Resources Officers and Chief Learning Officers of the Reskilling Revolution platform will work on the adoption of the skills taxonomy to help make skills the key currency of the labour market and create greater efficiencies in the labour market.

The Preparing for the Future of Work industry accelerators are estimated to have reached nearly 8 million employees to prepare them with future-oriented skills. In addition, the Chief Human Resource Officer Community brings together companies’ HR leaders to share best practices and mobilize action to provide better jobs and skills to a further 4 million employees.

Multistakeholder coalitions that joined the Reskilling Revolution, led by UNICEF and the ILO among others, have been focused on delivering better education and skills, through equalizing access to digital learning (mass teacher reskilling, or identifying, supporting and amplifying new approaches.

Company-led initiatives are helping future-proof their workforces, even in an economically constrained environment. Reskilling Revolution companies are leading new approaches to support their workforces, and their supply chains and communities through access to education, skills and better jobs. In addition to founding members of the platform, such as Adecco Group, LinkedIn and ManpowerGroup, the initiative recently welcomed new partner commitments from Royal Bank of Canada, Unilever and Verizon.

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