While the needed investments into low carbon energy are relatively modest, nations need to radically shift away from fossil fuels in order to meet the agreed-upon targets, according to a study conducted by the International Institute for Applied Systems Analysis (IIASA) and published Monday in the journal Nature Energy.
Under the 2015 Paris accord, the member states of the United Nations agreed to keep the overall temperature of the planet at between 1.5 and 2 degrees Celsius above pre-industrial levels.
That’s the figure the vast majority of scientists say is required to avoid the most catastrophic effects of climate change caused by greenhouse gas emissions.
Many of the U.N. countries agreed to invest in renewable and low-carbon energy to meet their goals, called “nationally determined contributions.” But according to the study released Monday, “a radical shift of investments” is needed to make that happen.
“It’s important for professionals in the finance sector to be aware how much more investment in low carbon solutions is needed if the world is to meet the Paris targets,” said Elmar Kriegler, one of the paper’s authors. “The [nationally determined contribution] pledges are a step in the right direction, though much deeper changes in the energy investment portfolio are clearly necessary.”
The study looked at the strategies required to meet the climate-change goals from an investment perspective, including how much would need to be invested in renewable energy and how much fossil-fuel investment needs to scale down.
As early as 2025, investments in low carbon energy will need to overtake fossil fuels, and then will need to grow much higher, the researchers found.
To meet the member states’ contribution pledges, $130 billion in investments is needed by 2030. To meet the 2-degree target, $320 billion is needed.
These amounts are far higher than the money needed to meet other U.N. sustainability goals like clean water, air pollution and access to energy, the study found.
The researchers used six different modeling tools called integrated assessment models to evaluate investments into combating climate change.
They found that different strategies are required in reaching the 2-degree goal versus the 1.5-degree goal.
“Investments into energy transmission and storage as well as for renewables and efficiency would need to be scaled up more rapidly for reaching 1.5°C,” said IIASA Energy Program Director Keywan Riahi. “On the other hand both targets (1.5°C and 2°C) will mean that upstream investments into coal extraction and unabated fossil power generation without carbon capture and storage will need to scale down rapidly to avoid further lock-in of the system into fossil fuel infrastructure.”
Last June, President Donald Trump announced that the U.S. would drop out of the Paris accord, saying the climate-change agreement put the nation “at a permanent disadvantage” and will undermine the economy.
Since then, 16 states and Puerto Rico formed the United State Climate Alliance as a coalition that remains committed to the goals of the Paris accord.