Where the Trillions Needed to Go Green Will Come From
The IEA’s new outlook suggests a surprising source of funding for the $4 trillion in annual clean-energy investments needed by 2030 to hit net zero.
A green future demands trillions in investment.
Photographer: Andreas Rentz/Getty Images EuropeA word you’ll find sprinkled liberally through the 500-odd pages of the International Energy Agency’s latest World Energy Outlook is “trillion.” Even today, it is a daunting word, especially when applied to dollars. And it represents one of the chief obstacles to the energy transition mapped out by the IEA’s models.
Clean technologies usually require a bigger upfront investment but enjoy savings from lower running costs, such as free sunshine and wind, down the line (I’m leaving out the “savings” of mitigating climate change, which are substantial). Payback periods can be long, though. For example, at prevailing prices, it would take about eight years for the savings on fuel costs from buying an electric vehicle to cover the upfront premium versus a traditional car, leaving out subsidies.1So when the IEA talks about annual clean energy investment needing to rise to $4 trillion by 2030 to achieve net-zero emissions, more than three times current spending, the question of where it will all come from rears up quickly.