World squanders “green recovery” as renewables dwarfed by huge fossil fuel subsidies

Global growth in renewable energy uptake grew to record levels last year – but it has lost a “historic opportunity” for a green recovery from the Covid-19 pandemic and energy emissions are surging higher.

The result has been detailed in the latest edition of REN21’s Renewables Global Status Report, which estimates that a total of US$366 billion (A$525 billion) was invested in renewable energy technologies in 2021.

But this remains dwarfed by an estimated US$5.9 trillion (A$8.5 trillion) in ongoing global fossil fuel subsidies, and REN21 warns that while renewables uptake continues to grow, the pace of transition remains insufficient to meet global climate change goals.

REN21 executive director Rana Adib says the recent energy crisis has exacerbated the situation, with some markets reaching out for new supplies of fossil fuels rather than switching to lower cost renewables.

“Although many more governments committed to net zero greenhouse gas emissions in 2021, the reality is that, in response to the energy crisis, most countries have gone back to seeking out new sources of fossil fuels and to burning even more coal, oil and natural gas,” Adib said.

According to the REN21 report, almost 315GW of new renewable energy capacity was installed in 2021 – marking an increase of 17 per cent from 2020 levels – and taking the global renewable energy market share to 12.6 per cent.

Solar PV made up the bulk of these new capacity additions, with 175GW of new capacity installed in 2021.

Wind power added 102GW of capacity, including a record 18.7GW of new offshore wind projects.

Other renewable energy technologies, including solar thermal, hydropower and bioenergy projects, contributed smaller shares to make up the 315GW total.

This, however, was insufficient to keep pace with a global increase in electricity consumption – which jumped 6 per cent higher last year as economies recovered from the impacts of the Covid-19 pandemic.

In the report, REN21 – a European-based think tank – raised concerns that global growth in energy consumption was leading to increased use of fossil fuels and found that most of the increase in global energy use in 2021 was met by coal, gas and oil.

Global greenhouse gas emissions were estimated to have grown by 6 per cent in 2021, representing a 2 billion tonne increase in emissions, highlighting the degree to which the world has missed an opportunity for a ‘green recovery’ from the Covid-19 pandemic.

Responding to the report, United Nations secretary general Antonio Guterres pointed the finger at government policies, which he said remained insufficient and left energy markets vulnerable to disruptive events like the Russian invasion of Ukraine.

“Let me be blunt: most national climate pledges are simply not good enough. The energy crisis exacerbated by the war in Ukraine has seen a perilous doubling down on fossil fuels by the major economies,” Guterres said.

“The war has reinforced an abject lesson: our energy mix is broken. Had we invested massively in renewable energy in the past, we would not be so dramatically at the mercy of the instability of fossil fuel markets.”

“New funding for fossil fuel exploration and production infrastructure is delusional.”

In the wake of surging fossil fuel prices, many governments have sought to increase fossil fuel subsidies to shield consumers from the higher prices – such as the Morrison government’s halving of the fuel excise tax to lower petrol prices and its ‘gas led recovery’.

But Adib said government policies would be better directed towards increasing the use of lower cost renewable energy technologies, as they would achieve the same outcome of cutting energy costs for consumers without leading to an increase in greenhouse gas emissions.

“Instead of putting renewables on the back burner and relying on fossil fuel subsidies to reduce people’s energy bills, governments should directly finance the installation of renewable energy technologies in vulnerable households,” Adib said.

“The old energy regime is collapsing before our eyes – and with it, the global economy. Yet crisis response and climate goals must not be in conflict. Renewables are the most affordable and best solution to tackle energy price fluctuations.”

“We must boost the share of renewables and make them a priority of economic and industrial policy. We can’t fight a fire with more fire,” Adib added.