Russia-Ukraine war leads to acceleration in clean energy investments
Yahoo Finance's Ines Ferré and Akiko Fujita discuss an IEA report stating that clean tech investment has been sped up by the Russia-Ukraine war.
- Well, the International Energy Agency now says the drop in Russian gas exports after its invasion of Ukraine will transform the global energy landscape. The agency's executive director, Fatih Birol, said, "Energy markets and policies have changed as a result of Russia's invasion of Ukraine, not just for the time being, but for decades to come." And as this was part of the world energy outlook that the IEA puts out every year.
It's interesting because so much of the conversation, at least in the US-- you could argue globally, too-- has been about supply constraints, whether, in fact, the transition to green energy has been happening so quickly. But a few timelines to note here. Number one, Fatih Birol says, look, despite what we're hearing, this, as in what's been happening between Russia and Ukraine, the global concerns around supply, has actually accelerated investments in clean energy.
Natural gas usage is likely to peak by the end of the decade, coal in the next few years, and then oil in the mid-2030s. So that's the timeline we're looking at right now. Some welcome news, but at the same time, those who have been pushing for more aggressive targets have said, look, this still doesn't get us to capping temperatures at 1.5 degrees by 2050, which is what we have heard over and over through the Paris Agreement, that this is what's needed to avert the worst-case scenario in climate change.
- Exactly. But I think the important point that you pointed out is that this does accelerate these efforts by countries to go into greener energies. And in fact, this IEA report also points to-- by 2030, pointing to the US Inflation Reduction Act, that annual solar and wind capacity additions in the US will grow 2.5 times over today's levels, electric car sales 7 times higher.
So it certainly does accelerate going into greener energies. Now, those in the fossil fuel world will say that you still need fossil in order to go green. But nonetheless, it is a demand that will be accelerating here. And we even see it with consumers. I mean, consumers are looking at solar panels to put on the top of their roofs because they want to pay less for their electricity.
- Yeah. And the IEA saying that, look, this is not just a conversation about climate change anymore. This is about energy security and countries increasingly looking to renewable as part of a way to reinforce that energy independence, especially in light of what has been playing out between Russia and Ukraine.