This widening gap suggests some progress in the global effort to move away from fossil fuels. Investment is a leading indicator of actual, physical things — new solar plants, wind turbines, power lines, and more — being built. The trillions invested in this year, last year, and so on, will translate to record-breaking amounts of clean-energy installations in the years to come.
But despite the promise, IEA says current investment levels are not enough to meet global pledges made in late 2023 to boost renewables and energy efficiency. Investment in renewables needs to double. Energy efficiency, a sector experts have long viewed as underfunded, needs investment to almost triple. So does electrification.
Meanwhile, fossil fuel investment has remained stubbornly high even as it loses ground to clean energy. Only in 2020, during the COVID-19 pandemic, did the world spend less than $1 trillion on coal, gas, and oil.
That mirrors a concerning trend within the global power sector: Renewables are growing at a record-breaking pace, faster than many thought possible, and yet emissions are still rising as countries simply use more electricity, burning more fossil fuels as a result. This dynamic will not solve climate change. In order for the world to decarbonize, investment in clean energy needs to be high enough for it to displace — and drive down — fossil-fuel use.