We Are Failing To Save The Planet
But we can remedy the situation easily.
Last year, at Cop28, nearly 200 countries agreed to triple their renewable energy capacity by 2030. Reaching such a monumental milestone would keep the possibility of limiting global warming to 1.5 degrees Celsius just about alive. As such, this agreement is one of our last-ditch attempts to keep the goals of the Paris Agreement alive. If we fail to meet it, the world will start to tip the world past a point of no return and into a climate apocalypse. So, it should worry you that a year later, IRENA found that at our current rate, we are miles away from tripling our renewable capacity by 2030. But all hope is not lost. We can fix this.
The International Renewable Energy Agency (IRENA) recently released a report on reaching this goal. While they noted that renewables are the fastest-growing power source worldwide, with global renewable capacity in 2023 growing by a record 14% from 2022, they also found that this isn’t enough. You see, even if this record rate of deployment is kept up, we will fall 13.5% short of the tripling capacity target. IRENA found that an annual growth rate of 16.4% is needed for us to reach this goal.
Now, this might sound like we are “close enough” to meeting this target. But don’t forget, we are way off track for meeting net-zero by 2050 and limiting global warming to safe levels. As such, this tripling target is a bare minimum and likely insufficient to curb climate change adequately. So the fact we can’t even reach such a low bar is utterly damning.
So, are we failing? And how can we do better?
Firstly, Africa. Despite the continent’s leaders pledging to increase their renewable capacity five-fold by 2030, they only had a capacity increase of 3.5% over the last year, compared to 9% growth in Asia and North America and 12% growth in South America. If Africa can reach its own five-fold goal, we will smash our global tripling goal. So, what is holding them back? Well, financing mostly.
Investors are incredibly cautious about piling money into African renewable energy. Institutional borrowing on the continent is eyewaterially high, and its energy market fluctuates massively, making such investments incredibly risky. As such, these renewable projects either struggle to get going or have to find another funding source, such as climate aid funds. But, Reuter recently found that more than two-thirds of climate aid received by middle-income countries between 2015 and 2020 was through loans, not grants. To add insult to injury, at least $18 billion of these loans had market-rate interest or above-market-rate interest. As pointed out by Reuters, this is far from normal, as climate aid loans tend to have no or very little interest. These loans funnel the funds back to the lending country’s economy quickly. For example, 90% of France’s $28.1 billion funding to this scheme was in the form of loans, and these loans are set to generate billions of dollars worth of interest over the next decade or so. Luckily, loans only made up 9% of the funds to low-income nations, with the rest being grants. However, developed countries found a way to ensure these funds returned to their economy by only giving these grants out on the condition they hire contractors or buy materials from their country. It is incredibly hard for a poorer nation, which needs to ensure they take every opportunity to grow their economy, to green-light a project like this, which locks much of the economic growth in a far-off first-world country.
So, the solution? Give African countries interest-free loans for renewable projects and dramatically reduce conditions for climate aid grants. From a purely pragmatic point of view, this is the easiest and quickest way to ensure we meet this target, and even net-zero, in time to save the world.
Some might argue that handing over such a vast amount of money into such a potentially risky industry and potentially politically unstable environment would be irresponsible. However, Western politics are hardly stable at the moment. Moreover, Africa will bear much of the brunt of climate change, both in terms of environmental damage and economic degradation. Furthermore, many climate technologies, such as EVs, rely on exploiting poorer African nations for mineral sourcing. Not only is opening up financing to Africa the easiest way of meeting our climate targets, but it’s also the right thing to do.
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Sources: IRENA, Climate Change News, Planet Earth & Beyond