The Paris Agreement universally adopted in December 2015 by all 195 countries involved in the UN Framework Convention on Climate Change was evidence that the world wants a global low-carbon economy. According to research by the UN Environment Programme and Bloomberg New Energy Finance, investment in renewable energy suggests the same: in 2015, $285.9bn was committed globally to renewables, the highest annual figure in history, and for the first time representing more than half of all investment in new energy capacity.
The leading lights in this record spend are China, the US, Japan and the UK. Developing countries spent more ($156bn) than developed economies ($130bn). Europe’s investment amounted to $48.8bn, down 21% on the previous year, and the UK accounted for $22.2bn, nearly half of the European total. Other countries are now catching up with Europe’s historical lead in renewables. The 2016 EY Renewable Energy Country Attractiveness Index ranks the US, China and India as its top three, and while seven European countries are in the top 20, only Germany and France feature in the top 10.
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Since 2010, Europe has been a pioneer in bringing renewables into the energy mix, helping to create a market (driven by subsidies) for commercial renewable energy technologies. It helped to demonstrate and commercialise technologies such as solar photovoltaic systems and wind power, which are now increasingly being rolled out worldwide. The EU renewable energy policies for 2020 and 2030 seek to help Europe reach a position where greenhouse gas (GHG) emissions in 2050 are 80% to 95% below 1990 levels: a sustainable low-carbon economy. While most European countries seem to be on track for the 2020 targets, perhaps the EU should be more ambitious for its 2030 achievements, which are set at a minimum 40% reduction in greenhouse gas emissions. Europe needs to keep putting out strong signals on renewables, as what is good for Europe is also good for the world.
Douglas Clark is director of Location Connections, consultants for economic development innovation.