Forum Report: $515 B Needed in Green Investments

The World Economic Forum on Jan. 29 released "Green Investing: Towards a Clean Energy Infrastructure." The report outlines the scale of the investments needed to develop a clean energy infrastructure and move to a low-carbon economy.

New Energy Finance, which collaborated with the World Economic Forum on the report, warns that unless at least US$515 billion per annum is invested in clean energy between now and 2030, carbon emissions will reach a level deemed unsustainable by scientists, causing temperatures to rise by 2 degrees globally.

The report identifies eight emerging, large-scale clean energy sectors that are expected to significantly contribute in the move to a clean energy infrastructure of the future: onshore wind, offshore wind, solar photovoltaic, solar thermal electricity generation, municipal solar waste-to-energy, sugar-based ethanol, cellulosic and next generation biofuels, and geothermal power.

The report's authors, Max von Bismarck and Anuradha Gurung from the World Economic Forum, and Chris Greenwood and Michael Liebreich from New Energy Finance, argue that "enormous investment in energy infrastructure is required to address the twin threats of energy insecurity and climate change. In light of the global financial crisis, it is crucial that every dollar is made to ‘multi-task’ to create a sustainable low-carbon economy."

Clean energy opportunities have the potential to generate significant economic returns. The report shows that even after a tumultuous 2008, an index of the world's 90 leading clean energy companies had a five-year compounded annualized return of almost 10 percent, unmatched by the world's major stock indices.

Other highlights from the report include:

• Clean energy investments increased from around $30 billion in 2004 to more than $140 billion by 2008. Investments in 2008 exceeded expectations at $155 billion (the report is based on projections for 2008 – which suggests that $142 billion would be invested by year-end).

• Investment in clean energy has not only increased, but has also diversified geographically. Developing countries attracted 23 percent ($26 billion) of asset financing in 2007, compared to 13 percent ($1.8 billion) in 2004.

• In addition, four key enablers for a shift to clean energy will be energy efficiency, smart grids, energy storage, and carbon capture and storage.

• Well-developed conditions for innovation, markets for clean energy through public procurement, energy efficiency standards, and stable and simple policies are essential to meet the climate change challenge.

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