To speed up the decarbonisation of the energy sector and limit global warming to 1.5° C, governments must work with the private sector to scale up much needed investments through conducive regulatory frameworks and policy solutions, says WRI and Ørsted in their new joint working paper.
To achieve a net-zero society by 2050 and a world that runs entirely on renewable energy, policymakers, businesses and investors must level up their collaborative efforts and continue to work together with urgency and focus to rapidly scale up global renewable energy capacity. While the green technologies are readily available, and the investments required are manageable – the energy transition is not happening fast enough to limit the worst effects of climate change. Ahead of COP26, this joint paper by World Resources Institute (WRI) and Ørsted lays out policy solutions to help policymakers take concrete actions now to speed up the energy transition.
The majority of the investment into the energy transition is expected to come from the private sector, and with the costs of solar and wind now lower than ever, there are billions of dollars poised to speed up the energy transition, but the right policies and financial frameworks are not yet in place, the paper states.
“The policies put in place today will determine whether or not we can transition to clean energy fast enough to protect the earth’s climate,” says Jennifer Layke, Global Director, Energy Program at World Resources Institute. “It’s up to governments to set our course to a modern, clean, renewable electricity system and the right market signals to spur private sector action.”
Renewable energy is crucial in the fight against climate change
Over 70% of global emissions come from the production and use of energy. To stay in line with a 1.5-degree pathway, countries must decarbonise their energy systems by 2050 and increase the share of renewable energy capacity by at least six times the current rate by 2030.
Fortunately, much of what is needed to achieve the renewable energy transition is already available today – the key technologies exist, the momentum of net-zero targets is growing, and there is a strong momentum from investors to support green investments. But we need to pick up the pace.
“This is a critical decade of climate action; governments can speed up the renewable energy transition by unlocking private sector capital,” says Mads Nipper, CEO of Ørsted. “By designing policies to attract more investments into renewable energy, governments can remove the challenges preventing the scaling up of renewables.”
This joint working paper will be launched at the Clean Energy Ministerial, at an official side event which features representatives from the Chilean and Danish government as well as from WRI, Ørsted, the International Solar Alliance and the Global Wind Energy Council.
Read the full paper here: orsted.com/renewable-energy-future.
Key takeaways from the working paper:
- The global transition to renewable energy is likely to be financed largely by the private sector.
- One critical element of the energy transition will be the decarbonisation of the world’s electricity supply. While the key technologies are available and the commitment from investors is rapidly increasing – current rates of deployment remain well below what is required.
- Challenges that inhibit the decarbonisation of the power sector fall largely into three categories: market structure that lacks appropriate support for private investments, lack of public support for siting renewable energy development, and inadequate grid infrastructure.
- Governments can and must play a critical role in scaling renewable energy capacity by providing regulatory frameworks and policy solutions to the challenges slowing down private sector investment.
- Priorities for governments will be to establish clean energy policies and market instruments to support renewable energy investments; improve planning and permitting, and address community concerns; and invest in modern electricity infrastructure.