What impact will increasing the share of renewable energy in the global energy mix have on global gross domestic product? A new report aims to find out.Intergovernmental sustainable energy organisation IRENA has issued a new paper that assesses how doubling the volume of renewable energy from 2010 will affect global wealth.
The reports believes that by increasing the share of renewable energy in the global energy mix to 36% by 2030, global gross domestic product (GDP) will increase by up to 1.1% (US$1.3 trillion).
The report, 'Renewable Energy Benefits: Measuring the Economics', issued last week is IRENA’s first analysis of the macroeconomic impact of deploying renewable energy.
Commenting on the nature of deployment of renewable energy on a global scale, Adnan Z. Amin said: “The recent Paris Agreement sent a strong signal for countries to move from negotiation to action and rapidly decarbonise the energy sector.”
Renewable energy benefits
Mr Amin added: “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.”
The report also analyses the impact of the increase in integration of the smart energy sources on a country basis.
According to the report, countries like Japan would see the largest positive GDP impact of about 2.3% while Australia, Brazil, Germany, Mexico, South Africa and South Korea would record a 1% growth.
Renewable energy deployments impact on human welfare
However, on global human welfare the impact of the smart energies adoption would result in an increase of about 3.7%- three to four times larger than the impact on GDP.
[quote] Employment in the smart energy sector would also increase from 9.2 million global jobs today to more than 24 million by 2030.
IRENA believes the growth 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, benefiting large importers like Japan, India, Korea and the European Union.
Amin reiterated: “Mitigating climate change through the deployment of renewable energy and achieving other socio-economic targets is no longer an either or equation, 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.”