Clean Power IRENA-11

Published on January 16th, 2016 | by Joshua S Hill

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Increasing Global Renewable Energy Would Increase Global GDP By $1.3 Trillion

January 16th, 2016 by  

A new analysis has concluded that by increasing the global share of renewable energy to 36% would increase global GDP by up to $1.3 trillion.

According to a new report published by the International Renewable Energy Agency (IRENA), Renewable Energy Benefits: Measuring the Economics, released today, increasing the global share of renewable energy to 36% by 2030 would increase global gross domestic product (GDP) by up to 1.1%, which equates to roughly $1.3 trillion. The reports aims are to provide “the first global estimate of the macroeconomic impacts of renewable energy deployment,” specifically, outlining the benefits that would arise by doubling the current global share of renewable energy deployment.

IRENA-10

The REmap scenario doubles renewable energy, while REmapE doubles renewable energy with a focus on electrification

“The recent Paris Agreement sent a strong signal for countries to move from negotiation to action and rapidly decarbonise the energy sector,” said Adnan Z. Amin, IRENA Director-General. “This analysis provides compelling evidence that achieving the needed energy transition would not only mitigate climate change, but also stimulate the economy, improve human welfare, and boost employment worldwide.”

More importantly, however, the report clearly shows that increasing renewable energy deployment by such levels would have a massive impact on a range of social and environmental issues — specifically, the report concludes that the impact of renewable energy deployment on welfare is estimated to be three to four times the impact it has on GDP, with global welfare increasing by as much as 3.7%.

IRENA-11

Employment, also, would benefit, with renewable energy jobs increasing from 9.2 million global jobs currently, to more than 24 million by 2030.

Furthermore, increases in global renewable energy deployment would not only impact the use of fossil fuels, but would also begin impacting global trade patterns — more than halving global imports of coal, reducing oil and gas imports, and benefiting large fossil fuel-importing nations and regions such as Japan, India, Korea, and the European Union as a whole.

“Mitigating climate change through the deployment of renewable energy and achieving other socio-economic targets is no longer an either or equation,” said Amin. “Thanks to the growing business case for renewable energy, an investment in one is an investment in both. That is the definition of a win-win scenario.”

 
 
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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • Freddy D

    These figures are massively conservative. Energy is somewhere in the zone if a $5-7 trillion industry every year. Trillion with a T. Any silicon valley investor worth their salt gets giddy over investing in something with potential to be a $10 or $100 million/year business. Pause and think about those proportions.

    With all of the cost reductions we’re seeing, let alone the cost of the historical military conflicts over energy, it’s easy to see a path with much cheaper energy than today. If the economy saves 10% of that per year and invests in something that returns productivity in future years, and it compounds, the “renewable energy dividend” will be huge. Yes, in the $trillions.

  • MrL0g1c

    Is increasing GDP a good thing? I say this because currently so much trade is ecologically harmful. I don’t view economics through the constrained mass-media perspective.

    • Ross

      I think this is the question of whether GDP growth can be decoupled from environmental destruction and how far we can get in achieving that.

      There areas where not everyone can share in wealth e.g. owning private beach front property in a beauty spot.

      Processes that can be made more perfectly circular with just an external energy input (the Sun) could scale up a lot. The earth’s carbon cycle is the main circular process that we’ve made unsustainable. There are lots of others like food production, fisheries, and mining that need to be made sustainable.

    • alan2102

      There’s good GDP and bad GDP. Double the size of the prison-industrial complex? Increase GDP, but bad GDP. Double the size of the renewables industry? Increase GDP, and good GDP.

  • sjc_1

    Renewable energy can be one of the economic boost for 21st century economies. It is ironic that the detractors are also pro business.

    • patb2009

      The deetractors are pro fossil eenrgy business. Coal mining and oil gear mostly. It’s pathetic.

      • Ross

        With fossil fuel businesses starting to go into chapter 11 because they can’t pay their debts funding is likely to be a problem for them. Even as the oil price falls we see renewable energy investment increase because investors are looking ahead.

  • SecularAnimist

    I don’t see a link to the actual IRENA report in CleanTechnica’s article, so here it is (there is a link at this URL to download the full report in PDF format):

    http://www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=36&CatID=141&SubcatID=690

  • Clark Magnuson

    There is no dealing with anthropomorphic global warming fundamentalist believers.
    Science is degraded if we produce peer reviewed papers that do not allow the null hypothesis. Do not let liberal religion take over science.

    • SecularAnimist

      Incoherent nonsense.

      • Bob_Wallace

        You’re being kind….

      • Clark Magnuson

        I was designing solar and wind powered electronics in 1982.
        I built myself a super insulated solar home in 82-84 and raise my own food organically.
        I am so ashamed I fell for the back door Marxist environmental brainwashing in college. I am supposed to be smart, and did not see through it until 1994.

        • Bob_Wallace

          What was this Marxist environmental brainwashing you endured?

          Did someone convince you that the people owned pollution rather than the corporations? Or that if the people owned coal plants then they wouldn’t pollute?

          I have to admit, I have no idea how Marxism and environmentalism come together.

          • Clark Magnuson

            Environmentalism is a power grab for big gov.
            What is Marxism? big gov.
            As the big guy says in prison, “You are breathing my air.”

          • Bob_Wallace

            OK, Clark. Consider:

            Hitler’s Third Reich was pretty big government. Not Marxism.

            The British Empire was pretty big government. Not Marxism.

            We’re going to have to give you a F in your junior high civics class. Please study up and try to do better next time.

          • Clark Magnuson

            Hitler had gov spending at 44% of GDP.
            The USA was at 12% until FDR and 20% thereafter.
            Obama spent 45%, but did it with deficits.
            The Stalin Canal was 100% slavery.
            Liberals would like more collectivism, and are not afraid to use the designer issues like global warming on Marx’s useful idiots. Don’t be a useful idiot like I was coming out of college. Wake up and see what subversive professors will do to promote collectivism.

          • Mike Shurtleff

            …and Republican right starting with Reagan has promised trickle down benefits, but has actually increased the gov deficit …AND collapsed the economy in the bargain.
            Democrats aren’t much better. Plutocracy sucks. So what about this makes fossil fuels a better way to go than renewables?
            You went for Marxist hippie goals before, now you protect the plutocracy and the large corporations with their over-influence of our government? You went with over-expensive back to the earth before and you think that’s what we’re in favor of here? Not me. We can enjoy plenty of energy and a good life for all with renewable energy now. It’s economically sensible now. It was not back then.
            I could see the potential back then, but could also see it was too expensive. I’ve been follow costs for decades now, especially cost of Solar PV. Times have changed. We needed fossil fuels and nuclear back then. We don’t now. No Marxist hippie stuff, just good economics.

          • Clark Magnuson

            Trickle down is a DNC talking point. Try try to think.

          • Mike Shurtleff

            BS It was Reagan’s promise and the promise of both Bushes.

            That is why it is now a DNC talking point!

            Where have you been?

          • Bob_Wallace

            Clark, you are way off topic with your crackpot version of history and politics. Let’s get back on topic and stay there.

    • Ross

      Right back at you fella.

    • Mike Shurtleff

      Ah, most of the scientists are saying AGW is real.
      Most of the right, the conservatives, are saying it’s not.
      You are confused.

      …besides renewable energy does need have nothing to do with AGW.
      The title here: “Increasing Global Renewable Energy Would Increase Global GDP by $1.3 Trillion” states alone. It is the better, most economically sensible, choice. I take your anti-AGW and raise you $1.3 Trillion in improved economics regardless. Please take your born again conservatism and reconsider. Fossil fuels are no longer the best source for our energy, renewables are. Solar PV, Wind, Storage, and EVs will continue to drop in price, so this will become more and more true. Think about it.

      • Clark Magnuson

        Watch Feynman Cargo Cult Science over and over until you see how it applies to the terrible science of today.
        Turn loose of liberal faith and go back to scientific method.

        • Mike Shurtleff

          Of course you totally ignored my main point: Screw the AGW debate, renewables still make better economic sense. Why is that? I should “try try”?

          You don’t even have the anti-AGW argument correct.
          Feynman Cargo Cult Science applies to tribal cultures that haven’t been exposed to and don’t understand modern science and technology. Applies more to GOP who denies AGW science, some because it’s not supported by literal interpretation of the Bible. Nutso, neither is round earth, or solarcentric orbits of planets. …and I’m very Christian, just not ignorantly so.

          I can correct this anti-AGW argument for you, but I’m not going to. The corrected version is a better argument, but still grossly wrong.
          Ya know, there’s an iridium layer at the KT boundary found throughout the world. It is the smoking gun for an astroid impact killing off the dinosaurs. I read about this in the 70s. There are still outlier theories now. Could there have been other factors? Sure. Was the astroid impact probably the main one? Duh!

          I like the comic somebody at work gave me. One guy says “Thousands of scientists agree AGW is real.” The other guy says “I’d like a second opinion.” Pretty much sums up the anti-AGW position for me. No real science based argument for anti-AGW, just FUD.

          …and I totally love breaking paradigms! …when it’s real. You are in one. Fossil fuels = Dead man walking.

  • Ross

    Their estimate is conditional on making good progress in using renewable generated electricity to power transportation.

    • newnodm

      Well, they are mixing decarbonize with renewable. Unfortunately, there probably needs to be nuclear in the mix.

      • JamesWimberley

        There is nuclear there already, and it provides a base load cushion for the next 20 years. There is zero evidence that nuclear needs to be included in new generating capacity, at twice the price in the best case plus risks and unpopularity. Even the reliability case is wearing thin – ageing reactors have quite a lot of shutdowns, not all planned. Japan’s huge pumped storage system was built to provide backup for nuclear, not renewables.

        • Martin

          I did not know Japan had a huge pumped storage system, do other countries have such systems as well, I think I read about Austria and maybe Norway.

          • Ronald Brakels

            Australia has pumped hydroelectric capacity that provides electricity during periods of high demand, and it has hydroelectric capacity that is only used at a capacity factor of something like 25%. And that low capacity factor basically means it is used like pumped storage that isn’t pumped. We can also use it for seasonal storage if we like.

          • Foersom

            > … it has hydroelectric capacity that is only used at a capacity factor of something like 25%. And that low capacity factor basically means it is used like pumped storage that isn’t pumped.

            Call it operating reserve.

            https://en.wikipedia.org/wiki/Operating_reserve

          • Ronald Brakels

            The hydro dams are certainly used in that capacity a lot. Load following might be the best way to decribe the pattern in which they generate most of their electricity.

      • Frank

        Why do you think we need nuclear in the mix? In any case, let’s put a price on what goes up a smokestack, and see what happpens. My guess is nuclear will not be able to compete.

      • Bob_Wallace

        Nuclear brings nothing but expensive electricity, the potential for serious disasters, and radioactive waste.

        Your waffles don’t get crispier because some of the electricity came from a reactor.

        • newnodm

          But my lights will work in the winter.

          • Bob_Wallace

            I don’t have a nuclear reactor and my lights stay on in the winter.

          • patb2009

            you only need enough battery to run the lights. If you switch to LED that may be 100 watts.

    • JamesWimberley

      Is it? There is nothing in the post to suggest that they are making this assumption. At a guess, electrifying transport will have little effect on GDP, as the manufacturing and service jobs will just migrate from the old sector to the new. There will be a large additional gain in welfare from lower air pollution (and I would add, noise) in cities.

      • Ross

        The report mentions how increased electrification of final use would increase the global GDP to the upper limit of their estimate.

        “that such a transition increases global GDP in
        2030 between 0.6% and 1.1%, or between
        around USD 700 billion and
        USD 1.3 trillion compared to business as
        usual. Most of these positive impacts on
        GDP are driven by the increased investment
        in renewable energy deployment,
        which triggers ripple effects throughout
        the economy. If the doubling of the
        renewable share is achieved through a
        higher rate of electrification of final
        energy uses, the increase in global
        GDP is even higher, amounting to some
        1.1%, or USD 1.3 trillion globally.” page 10

        http://www.irena.org/DocumentDownloads/Publications/IRENA_Measuring-the-Economics_2016.pdf

    • patb2009

      that’s happening.. EVs are growing at 27% YoY sales, and the industry is growing capacity. From Compacts to Minivans and next year with SUVs the rise of the EV is changing it all.

      • Ross

        A sustained 27% CAGR is sufficient to make a real impact in number of vehicles.

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