How to finance the energy transition

Finance is a key enabler in the energy transition. Two conceptually different categories of financial flow will be required for the transition - investment and concessional/grant payments.
With the right government policies in place, investment will come primarily from business, whilst concessional/grant payments will need funding through voluntary carbon markets, philanthropy and governments
There is enough money globally to finance the energy transition but we need to make sure that the business case is clear. Rapidly falling costs in renewable energy provides clear opportunities and returns for investors, and benefits for consumers in terms of lower cost energy and energy security.
To finance the transition, investment needs to average around $3.5 trillion a year between now and 2050. After accounting for the expected decline in investment in fossil fuels, this figure falls to $3 trillion a year, or around 1.3% of annual global GDP over the next three decades.
Investment will need to grow from $1trn today to $2trn by 2025, $3trn by 2030. This requires a doubling of investment in high-income countries and China by 2030, but a four-fold increase in middle- and low-income countries.
The cost of financing the energy transition is ambitious but feasible with strong government policies and financial contributions from corporates via voluntary carbon markets, philanthropists and high-income governments.
To find out more, read the ETC’s report 'Financing the Transition: How to Make the Money Flow for a Net-Zero Economy' here; www.energy-transitions.org/pu...