G20 declaration puts global renewables target within reach ahead of COP28

The global energy transition received a significant boost recently when G20 leaders in New Delhi adopted the International Renewable Energy Agency’s (IRENA’s) recommendations on the need to triple global renewable energy capacity by 2030.

With the 2023 United Nations Climate Change Conference (COP28) taking place in the United Arab Emirates (UAE) in less than 12 weeks, the world now has an opportunity to fully align on achieving the primary goal of the Paris Agreement: to limit rising global temperatures to 1.5°C.

To meet this objective, a comprehensive transformation in energy consumption and production is necessary. This involves transitioning away from a dependence on fossil fuels toward a more sustainable and clean energy system.

Over the past decade, thanks to rapidly falling costs, renewable energy has emerged as the most cost-effective energy solution for meeting the growing needs of global populations, while simultaneously combating climate change. However, current progress in renewable energy deployment remains insufficient.

According to IRENA's World Energy Transitions Outlook 2023 (WETO) report, there is an urgent need to triple the world's renewable energy capacity from approximately 3,000 GW to just over 11,000 GW by the year 2030.

Earlier this year, G7 leaders agreed to step up action on the energy transition and adopted recommendations that would put the group in line with IRENA’s 1.5°C pathway. The addition of the G20’s global clout earlier this week demonstrates the momentum IRENA’s scenario is building, not just in terms of the rapid deployment of renewables, but also around their financing.

The G20 declaration from the New Delhi summit also cites a joint report between IRENA and India's G20 Presidency, titled, "Low-Cost Finance for the Energy Transition", estimating the need for more than USD 4 trillion in annual investments by 2030.

This too is a major – and timely – windfall for the energy transition. The international community will soon gather at COP28 in Dubai. Once there, countries will be reminded of the need for mobilising and increasing access to low-cost capital in support of renewables everywhere, especially in the Global South, where many frontline communities exist.

These communities do not receive a fair share of renewables investment. In fact, 85% of investments in renewables benefit less than 50% of the world’s population. This pattern has persisted for the past decade and needs addressing, if the world is to achieve the Paris Agreement goals.

Closing the growing investment gap between the developed and developing world requires a realignment of the way in which international cooperation works. Multilateral financing institutions should prioritise building supporting infrastructure that would underpin the new energy system.

IRENA's WETO envisions three pillars that will form the foundation for a way forward.

First, building the necessary infrastructure and investing at scale in grids, via both land and sea routes, to accommodate new production locations, trade patterns and demand centres.

Second, advancing an evolved policy and regulatory architecture that can facilitate targeted investments.

The third is by developing the necessary institutional capacities to help ensure that skills and capabilities match the energy system we aspire to create.

This prioritisation would help deliver development and climate priorities, triggering virtuous economic and social dynamics. Importantly, this would enable private sector investment in countries and regions that currently face barriers such as high capital costs.