IRENA: Boosting Renewables Could Increase Global GDP $1.3 Trillion By 2030

Achieving a 36% share of renewable energy in the global energy mix by 2030 would increase global gross domestic product (GDP) by up to 1.1% – roughly $1.3 trillion – according to new analysis by the International Renewable Energy Agency (IRENA).

“Renewable Energy Benefits: Measuring the Economics,” released at IRENA’s sixth assembly, provides the first global estimate of the macroeconomic impacts of renewable energy deployment, says the agency. Specifically, it outlines the benefits that would be achieved under the scenario of doubling the global share of renewable energy by 2030 from 2010 levels.

On Jan. 16-17, government officials from over 150 countries and representatives from the private sector, civil society and international organizations gathered in Abu Dhabi, the United Arab Emirates, for the sixth IRENA assembly. According to the agency, this meeting, the first international conference held post-COP21, will help move the Paris agreement to the next phase: action and implementation.

“The recent Paris Agreement sent a strong signal for countries to move from negotiation to action and rapidly de-carbonize the energy sector,” states Adnan Z. Amin, IRENA’s 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.”

Beyond finding that global GDP in 2030 would increase by up to $1.3 trillion – more than the combined economies of Chile, South Africa and Switzerland, as of today – the report also analyzes country-specific impacts.

IRENA says Japan would see the largest positive GDP impact (2.3%), but Australia, Brazil, Germany, Mexico, South Africa and South Korea would also see growth of more than 1% each.

According to the report, improvements in human welfare would go well beyond gains in GDP – thanks to a range of social and environmental benefits. The impact of renewable energy deployment on welfare is estimated to be three to four times larger than its impact on GDP, with global welfare increasing as much as 3.7%.Employment in the renewable energy sector would also increase from 9.2 million global jobs today to more than 24 million by 2030, the report notes.

IRENA adds that a transition toward greater shares of renewables in the global energy mix would also cause a shift in trade patterns, as it would more than halve global imports of coal and reduce oil and gas imports – in turn, benefiting large importers such as Japan, India, Korea and the European Union countries. Fossil fuel-exporting countries would also benefit from a diversified economy.

“Mitigating climate change through the deployment of renewable energy and achieving other socioeconomic targets is no longer an either/or equation,” continues 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.”

This IRENA report builds on the agency’s previous analysis on the socioeconomic benefits of renewable energy and on REmap 2030, a renewable energy roadmap to doubling the global share of renewable energy by 2030.

The full report can be downloaded here.