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Clean Energy: A Multi-Trillion Dollar Opportunity

Posted by Christopher N. Fox at Aug 05, 2014 01:00 PM |
To avoid the worst impacts of climate change, the world needs to invest $44 trillion in clean energy by 2050 – an average of $1.2 trillion per year for the next 36 years. We have a long way to go to achieve the Clean Trillion goal, however, there are several signs of progress.
by Christopher N. Fox, Director, Special Projects Ceres Posted on Aug 05, 2014

To avoid the worst impacts of climate change, the world needs to invest $44 trillion in clean energy by 2050 – an average of $1.2 trillion per year for the next 36 years.

Yet global investment in clean energy was just $254 billion in 2013, down from $286 billion in 2012 and down from the record $318 billion in 2011. We have a long way to go to achieve the Clean Trillion goal. There are, however, several signs of progress.

First, global clean energy investment is back on an upward trajectory. In the first quarter of 2014, investment in clean energy grew nine percent compared to the same period a year earlier, reaching $48 billion. It increased nine percent again in the second quarter compared to the same period in 2013, reaching nearly $64 billion. “The new investment upswing is broad-based, with activity rising across wind and solar, large-scale and small-scale projects, and covering most of the big markets,” said Michael Liebreich of Bloomberg New Energy Finance. “The industry is gathering momentum once again.”

Second, the $80 trillion bond market is awakening to the climate change challenge – and the clean energy opportunity.  Ceres’ Investor Network on Climate Risk, an alliance of investors with $13 trillion in assets, recently launched a new green bonds working group to help build the market by setting investor expectations for green bonds.  In July, Zurich Insurance announced it was doubling its commitment to green bonds, and Barclays and MSCI launched the first green bond index.  The total universe of bonds linked to climate change solutions stands at $503 billion, according to a new Climate Bonds Initiative report.

Third, despite Congressional gridlock on climate change and clean energy legislation, the EPA is moving forward with rules for electric power plants that will cut carbon pollution and spur increased clean energy investment. Some electric utilities are already joining forces with state officials to boost renewable energy and energy efficiency – two key building blocks to implementing the EPA carbon rules.  A report from Ceres and Clean Edge ranked the nation’s largest electric utilities and their local subsidiaries on their renewable energy sales and energy efficiency savings. Many of the top-performing utilities are based in states and regions with aggressive clean energy policy goals. The report demonstrates that utilities in states with strong clean energy policies, such as renewable energy standards, are well positioned to meet the new EPA carbon reduction goals.

Last month 128 companies and 49 investors, managing $800 billion in assets, sent letters of support for the EPA carbon rules to the Obama Administration and Congressional leaders.  This month, business leaders and policymakers have shown overwhelming support for the carbon rules at public hearings across the country. You too can add your voice in support of the EPA Clean Power Plan and help accelerate the transition to the clean energy economy.

My Ceres colleagues and I welcome your thoughts and questions on the Clean Trillion campaign. Please feel free to connect with me at fox@ceres.org or on twitter @ChristopherNFox