Recalling the commitments made at last year’s climate summit COP28 to double global renewable energy capacity, as proposed by the IEA, and to double the rate of energy efficiency, IEA Executive Director Fatih Birol stated that financing and other tools are needed to implement these commitments.

3 NEW GLOBAL COMMITMENT PROPOSALS

Fatih Birol reported that they are currently working with the Azerbaijani government on three new global commitment proposals. He mentioned, “The first one is focused on batteries. We are studying how much battery capacity needs to increase by 2030. The second is about grids, and the third topic is reducing methane emissions. We are proposing a commitment that will bring together Kazakhstan, Turkmenistan, and other countries in the region under Azerbaijan’s leadership. I can say that we are focusing on these three topics ahead of COP29.”

Birol emphasized that another key theme of the discussions is clean energy financing, sharing that financing for clean energy directed towards developing countries needs to increase sixfold.

He continued by stating, “In our meeting, there was a very high participation from the financial sector, including the European Bank for Reconstruction and Development (EBRD), the World Bank, the International Finance Corporation (IFC), and private sector financing institutions. Currently, developing countries alone require approximately $2 trillion annually for clean energy financing. We are working together to establish a financial model and create a concrete framework in this regard. Our next meeting will be within the context of the UN General Assembly, and we aim to come with a tangible proposal by then. Azerbaijan has declared us a strategic partner, and we are closely collaborating.”

I believe this year’s COP29 could yield two significant outcomes. The first would be the acceptance of the three global commitments I mentioned, and the second would be an agreement on new financing targets and how to reach them.”

Discussing the challenges of defining which countries are responsible for what in terms of global warming and how to determine these responsibilities, Birol underlined the effort to distribute roles among countries, especially international development banks.

COP29 will be held in Baku from November 11-22.

ONLY 15% OF THIS YEAR’S CLEAN ENERGY INVESTMENTS WILL BE IN DEVELOPING ECONOMIES OUTSIDE CHINA

According to the IEA’s World Energy Investments report released this month, global energy sector investments are projected to surpass $3 trillion for the first time this year.

Despite rising financing costs, it is expected that $2 trillion of this investment will be directed towards clean energy technologies such as renewable energy, electric vehicles, nuclear energy, grids, batteries, low-emission fuels, and energy efficiency solutions.

It is anticipated that just over $1 trillion of the remaining investment will be allocated to fossil fuels, including coal, oil, and gas.

Although clean energy technology investments are increasing globally, there is an uneven distribution among regions.

This year, total clean energy investments are expected to be $675 billion in China alone, while investments in Europe and the U.S. are expected to reach $370 billion and $315 billion, respectively. Thus, these three major economies account for more than two-thirds of global clean energy investments, demonstrating inequality in international capital flows.

The largest developing economies outside of China, including India and Brazil, are expected to reach $300 billion in clean energy technology investments for the first time, but this amount corresponds to only 15% of total clean energy investments.

High capital costs in these countries are making it difficult to develop new projects. Therefore, it is crucial to provide the necessary financing to ensure a fair clean energy transition in developing countries.


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