Governments could chart a path to a fully decarbonised energy system by the middle of the century and revive economies hit by the coronavirus if they tailor stimulus packages to boost clean energy technologies, according to a report published on Monday.
With governments adopting massive stimulus packages to blunt the shock of the virus, calls are building for a "green recovery". A group of 180 European politicians, companies, lawmakers and campaigners last week urged the EU to align its economic rescue measures with climate goals.
In its inaugural annual Global Renewables Outlook, the Abu Dhabi-based International Renewable Energy Agency (IRENA) said choices by governments would help decide whether the pandemic served to delay or accelerate a low-carbon transition.
"Governments don't have all the money they need. So they have to prioritize," IRENA director general Francesco La Camera told Reuters.
"The question is where they are going to prioritise. And we have demonstrated that renewables are the best way to produce good jobs, the best way to impact GDP."
Governments have a wide range of options for boosting renewables, La Camera said, from tax credits for consumers who buy solar panels for their homes, to public investments in improving inter-connectivity between national power grids, or redesigning grids to cope with a bigger share of renewable power.
The report lays out various potential pathways for how the world energy system could evolve.
Under current government policies, the world is on track to invest $95 trillion from 2016-2050 in energy systems -- which would leave carbon dioxide emissions at roughly the same level they are today.
That would dash hopes of achieving the temperature goals of the 2015 Paris Agreement to avert catastrophic climate change.
IRENA says policies will need to unlock a total $110 trillion of investment over the same period to reduce energy-related CO2 emissions to 70% below today's levels by mid-century.
This level of investment would boost global GDP growth by 2.4% by 2050 compared with current plans, and quadruple jobs in the renewable energy sector to 42 million, more than offsetting job losses in the fossil fuel industry, the report found.
For the world to achieve a fully decarbonised energy system by mid-century would require total investments of $130 trillion.
Investments should focus on renewables, energy efficiency and electrification, IRENA said. Funding for green hydrogen, advanced biofuels and clean transportation will be needed to remove the final, hardest-to-cut emissions.
IRENA found that each $1 spent on the energy transition would yield a return of $3-$8, by curbing the costs associated with the devastation caused by climate change and the deadly health impacts of air pollution.