Doubling the investments in renewable energy by 2030 would increase the global GDP by 1.1 per cent at various degrees for individual nations, except for oil and gas exporting countries, which will experience a drop in GDP.
Yet, doubling investments in renewables, which would mean 36 per cent global share of renewable energy into total energy mix, is the only way to keep climate change under control. During the International Renewable Energy Agency, or Irena Assembly that took place on January 16-17 in Abu Dhabi, the economic and welfare benefits of renewable energy were at the forefront of meetings.
“Doubling the share of renewables in the global energy mix by 2030 would increase global GDP between 0.6 per cent and 1.1 per cent or between $700 billion and $1.3 trillion,” said Rabia Ferroukhi, Irena’s policy lead.
According to Irena’s report on economic benefits of renewable energy, launched during the Assembly, oil and gas exporters such as Russia, Saudi Arabia or UAE would face reductions in their export volumes in the long term. The oils and gas sector in Saudi Arabia, for example, represents around 25 per cent of GDP and double investments in renewable energy worldwide mean a GDP decline by two per cent. Diversifying the economy is the economic answer for fossil fuel exporters such as Saudi Arabia or UAE. This can be achieved by integrating renewable energy into an overall strategy, which also includes the increase of energy efficiency, which the UAE is already doing.
“All types of economies, including fossil fuel exporters can engage in renewable energy economies,” pointed out Adnan Amin, general manager of Irena. “A 15 per cent share of renewable energy in the total energy mix would be enough to trigger investments,” he added. Investments in renewable energy would trigger not only a healthier economy, but better welfare too – reduced health effects, improved livelihoods, poverty alleviation, job creation, gender equality and enhanced access to water and food.
Globally, there are 1.1 billion people who lack access to electricity and nearly 2.6 billion who rely on traditional biomass for heating. “Doubling the share of renewables by 2030 has a positive impact on global welfare, which would increase by 2.7 per cent,” said Ferroukhi. Still, this would not eradicate lack of access to electricity for everyone. For even the most remote villager to have access to electricity would require global annual investments to increase from the current $9 billion yearly to $50 billion. A healthy economy based on clean energy would also trigger employment opportunities. Since the financial crises in 2008, 61 million jobs have been lost.