Economic Impact of Renewable Energy: Projection 2023
Renewable energy will have a significant economic impact in 2023 at both global and sectoral levels. Switching to renewables can bring down individual energy costs significantly. It also helps unstable economies to achieve energy independence. It aids in creating jobs in emerging markets with locally available resources.
Developing nations are amongst the badly affected by climate change. With traditional power sources, they bear a higher energy cost. Shifting to renewable energy will create an economic shift in the following areas of interest.
Cheapest form of energy
In many parts of the world, renewable energy might just be the cheapest source of energy. There are a lot of regions that lack access to the conventional energy grid. They are often economically weak with political disputes. It would do well for countries to capitalize on the current fall in prices of renewable energy infrastructure.
The costs of Solar electricity fell about 85%[1] in the decade between 2010 and 2020. They are predicted to fall further in 2023. The price of electricity from onshore wind fell about 56% and offshore wind fell about 48%. The falling costs make renewables an attractive option for developing nations, where the energy demand is high. There is huge potential for low and middle income nations to be powered by low-carbon energy sources in the future. This is fuelled by the renewable competitiveness against the sharply rising prices of gas and coal.
Impact of renewables on the job market
The International Energy Agency predicts that about 5 million jobs will be lost in Fossil fuel production by 2030. However, the renewable energy industry will create 14 Million jobs, with a net total of 9 million new jobs.
The allied economics of renewable energy includes innovative technology in EV production, energy storage, energy-efficient appliances, etc.
These sectors could create an additional 16 million jobs. Thus clean energy, including its infrastructure and all low-emission technology will create a total of 30 million jobs by 2030.
Cost savings in climate change
Climate change has cost the US roughly 240 billion USD per year in damages. If climate change proceeds at the same pace, then it will increase by 10% in the coming years. The fossil fuel industry received about 5.9 Trillion USD in the form of subsidies, tax breaks, and damages, in 2020. In order to achieve net-zero emissions by 2050, we need to invest at least 4 Trillion USD till 2030. This includes research and implementation of renewable technology and infrastructure.
Countries with limited resources might find it daunting to meet these investments, but the funding will translate into significant savings. It can save up to 4.2 Trillion USD per year by 2030, in pollution and other climate crisis mitigation measures.
The investment will reduce market shocks and improve resilience in energy systems. The diversification of energy sources reduces the economic strain on fossil fuel imports.
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Reference(s):
1. Article titled, ‘Five ways to jump-start the renewable energy transition now’ by United Nations
