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Clean energy journalism for a cooler tomorrow

Chart: Clean energy attracting nearly twice as much investment as fossils

But for the world to meet its climate goals, the money needs to stop flowing to fossil fuels — and flow even faster into clean energy.
By Dan McCarthy

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An image of a pile of $100 bills with a yellow overlay that reads "Chart of the week"

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.

To deal with the climate crisis, the world needs to build a lot of carbon-free energy. And to build a lot of carbon-free energy, the world needs to spend money — a ton of it.

It’s encouraging, then, that more and more dollars are flowing to sectors like low-emissions power, energy efficiency, batteries and electrification, per the International Energy Agency’s most recent World Energy Outlook.

Thanks to this trend, clean energy projects now attract nearly two dollars for every dollar spent on fossil fuels. Five years ago, the ratio was 1-to-1.

The lion’s share of energy investment is going to low-emissions power, a segment that includes renewables as well as nuclear, while oil remains the second-biggest winner. Energy efficiency as well as grids and battery storage are next in line, beating out natural gas. But even as coal declines in most of the world, more money is flowing to it than toward electrification or low-emissions fuels.

In total, just over $1.7 trillion is expected to be invested in clean energy this year, helping to install solar panels, deploy heat pumps and pilot early-stage low-carbon fuel projects. Fossil fuels, meanwhile, are expected to attract about $1 trillion this year, roughly in line with spending over the last five years.

Despite the progress, the status quo is not good enough if the world is to stay below even 2 degrees Celsius of warming. Much more money needs to flow to clean energy projects — around $4.5 trillion per year by the early 2030s, the IEA says — and investors need to not only slow their spending on fossil fuel infrastructure but stop it altogether. For now, investment in fossil fuels remains stubbornly high.

Dan McCarthy is news editor at Canary Media.