Achieving our global goals of universal access to clean energy and averting a climate crisis will require a mass scale-up of investments in renewable energy infrastructure, redirecting capital from carbon intensive energy and transport systems. The International Renewable Energy Agency estimates that the transformation of the energy system alone will need cumulative investments to reach USD 110 trillion by 2050 to keep the rise in global temperatures to well below 2°C and towards 1.5°C during this century. Of that amount, over 80% will need to be invested in renewables, energy efficiency, end-use electrification, and power grids and flexibility.
The private sector and private finance will play an important role in scaling renewable energy generation, transmission, and storage. Much of this investment will be cross-border, as capital and technology must flow to developing and emerging economies to bridge the widening regional differences in the rate and amount of renewable energy investments.
To help accelerate a shift of finance into renewable investments by foreign companies, it is critical to address the key constraints that hinder the scale-up of renewable investment, as well as the key determinants that would accelerate the necessary capital for a sustainable energy transition. Understanding these factors is a critical input to policy-making across a range of government agencies and functions, for development finance institutions, and for other international organizations.
Ladan Mehranvar & Sunayana Sasmal,
The Role of Investment Treaties and Investor–State Dispute Settlement (ISDS) in Renewable Energy Investments,
Available at: https://scholarship.law.columbia.edu/sustainable_investment/5