IRENA’s World Energy Transitions Outlook 2023: Navigating the 1.5°C Climate Pathway and Accelerating Global Energy Transition

This entails reducing CO₂ emissions by approximately 37 Gt from 2022 levels and achieving net-zero emissions within the energy sector by 2050. The report meticulously tracks advancements and gaps in the global energy transition across various sectors and regions, underscoring the pivotal role of G20 countries in spearheading this transformative journey.

The 1.5°C Climate Pathway:

This section underscores the urgency and feasibility of the 1.5°C climate pathway. It articulates the necessity for unprecedented levels of innovation, collaboration, and political will to achieve the ambitious goal. While technically and economically viable, the transition requires extensive efforts. Moreover, it emphasizes the manifold benefits the energy transition can bring, including improved health, poverty reduction, increased employment, and enhanced security.

Sectoral Transformation Pathways and Policies:

Examining key sectors like electricity, transport, industry, buildings, and agriculture, this section outlines specific actions and measures essential for their transformation. Additionally, it identifies policies and regulations crucial for enabling and accelerating the deployment of low-carbon technologies, encompassing renewable energy, electrification, efficiency, clean hydrogen, and sustainable biomass. The power sector emerges as the linchpin, providing clean and affordable electricity across all end-use sectors. The transport sector, deemed the most challenging to decarbonize, necessitates a shift from fossil fuels to electricity, hydrogen, and biofuels. The section also underscores the importance of energy efficiency, circular economy principles, and behavioral change in reducing energy demand and emissions.

Investment Needs, Financing, and Policy Frameworks:

This section estimates the investment requirements and financing sources for the energy transition, proposing strategies to mobilize necessary capital while mitigating risks and costs. Recommendations are provided for establishing an enabling policy framework aligning the energy transition with socio-economic and environmental goals, including job creation, health, and biodiversity. The report projects an average annual investment of USD 4.4 trillion until 2050, equivalent to approximately 5% of the global GDP in 2022. It identifies key financing sources such as public funds, private capital, multilateral development banks, and green bonds. The importance of implementing carbon pricing, subsidies reform, regulations, and standards is highlighted to foster a level playing field for low-carbon technologies and stimulate innovation and investment.