Clean energy investment hits new highs and shows no sign of slowing

Summary

The world is set to invest nearly twice as much in clean energy as fossil fuels this year, according to a new International Energy Agency report. While fossil fuel outlays are still significant — about $1.15 trillion this year — they’ll be dwarfed by clean energy, which is expected to receive $2.15 trillion in 2025. But the real takeaway is that the energy transition doesn’t show signs of slowing. Plotting the two investments trends is revealing. Over the last decade, fossil fuel investment has been relatively steady, if declining slightly. There has been an uptick since a drop that coincided with the pandemic, but even that shows signs of softening this year. But clean energy investment follows a different path, a far more aggressively positive trend: The curve is up and to the right. Global clean energy investment has outpaced fossil fuel outlays for the last decade.Image Credits:Tim De Chant/TechCrunch For data nerds: A second-order polynomial fit to the fossil fuel investment does a reasonable job of explaining the variance (R2 = 0.74), suggesting the world might be extracting a bit more oil, coal, and gas in the near future. But the same type of equation applied to clean energy figures fits the data far better (R2 = 0.94). Unless the world takes a U-turn — something that hasn’t happened in the 10 years the IEA has collected this data, pandemic included — expect bigger clean energy numbers next year. The big question is whether it’ll be too little, too late. To hit net zero by 2050, the world has to invest an average of $4.5 trillion annually, according to a report from the World Economic Foundation. That’s double this year’s investment, which sounds like a lot. But analysts have previously issued overly cautious clean energy investment forecasts. The trend in the new IEA data suggests that the goal is within reach. Clean energy’s exponential growth won’t last forever; the trend is likely to taper off in the coming years, just like it did in the mid-2010s. But a...