2014 Highlights: Clean Energy Up 16%, Green Bonds, U.S.-China Climate Change Deal

At the start of the New Year there is hopeful news on climate change and clean energy, but also an urgent challenge. The hopeful news: clean energy investment jumped 16% in 2014 to near its all-time high. The urgent challenge: to accelerate progress and expand clean energy investment to the levels needed to tackle climate change.

Ceres launched the Clean Trillion campaign at the start of 2014 with a dual objective: ratcheting down investment in fossil fuels and scaling up investment in clean energy. To limit global temperature rise to no more than 2° Celsius and avoid the worst impacts of climate change, it’s necessary to grow investment in clean energy by an additional $500 billion per year by 2020 and an additional $1 trillion annually by 2030.

So, how did the world do with regard to clean energy investment in 2014?

In short, strong progress was made, but much bolder action will be needed in 2015.

First, global clean energy investment grew 16% in 2014 to $310 billion, according to new data released by Bloomberg New Energy Finance (BNEF):

• Investment in 2014 was more than five times the figure of $60.2 billion attained in 2004, and nearly reached the all-time record of $317.5 billion reached in 2011.
• Solar made up almost half of the total with $149.6 billion, up 25% from 2013.
• Investment in wind rose to $99.5 billion, up 11% from 2013.
• Energy smart technologies, including smart grid, power storage, efficiency and electrified transport, increased to $37.1 billion of investment, up 10%.
• China led the global clean energy race, up 32% to a record $89.5 billion. Meanwhile, Europe was up only 1% to $66 billion, and the US was up 8% to $51.8 billion. Also noteworthy were Canada, up 26% at $9 billion; Brazil, up 88% at $7.9 billion; and India up 14% to $7.9 billion

Second, green bonds enjoyed a record year in 2014, with $38 billion sold, according to BNEF. That is two-and-a-half times the 2013 total of $15 billion. And it’s a very encouraging sign, since harnessing the power of the $80 trillion global bond market is a critical part in meeting the Clean Trillion objectives.

Third, governments stepped up their leadership in tackling climate change in 2014. The world’s two largest emitters – the U.S. and China – announced a surprise climate deal in November. The U.S. agreed to cut its emissions by 26-28% by 2025, and China agreed to peak its carbon emissions by 2030. China also announced it would cap its coal use by 2020, and build a whopping gigawatt of clean energy per week from now until 2030 (a gigawatt is the size of one large power plant). And at the UN climate talks in Lima in December, all nations agreed to tackle their emissions and forge a universal climate agreement in Paris in December 2015.

While 2014 saw significant steps forward, global investment in clean energy at $310 billion is still far short of what is needed to tackle climate change at the speed and scale that the world’s governments have agreed is necessary. To limit global warming to two degrees Celsius, the International Energy Agency estimates the world needs to invest an at least an additional $44 trillion in clean energy by 2050 (an average of more than $1 trillion additional per year for the next 35 years).

To close the clean energy investment gap, Ceres’ Clean Trillion campaign is mobilizing investors, businesses, and governments in 2015 to step up their leadership on clean energy. The progress achieved in 2014 provides tremendous forward momentum for ramped up clean energy investment in the year to come.

My Ceres colleagues and I welcome your thoughts and questions on Ceres’ Clean Trillion campaign. Please feel free to connect with me at fox@ceres.org or on Twitter @CleanTrillion