On the Was COP28 one step forward, two steps back? episode of the USSC Briefing Room, USSC Non-Resident Senior Fellow Lachlan Carey, Manager at RMI, shared this stat regarding the global energy transition.

“I think spending is an incredibly powerful indicator of revealed preference and whether we’re meeting our goals... If we boil it down to what it’s really going to take, the IEA (International Energy Agency) estimates that we need something in the order of $4 trillion a year spent on the clean energy transition in order to meet our goals. It’s about 4 per cent of the globe’s annual economic output. Today, we’re at about $1.1 trillion a year, so we’re still a long way off meeting that target. It gives you a sense of the scale. And about a quarter of that $1.1 trillion comes from government spending. So, I think the combination of those three numbers helps us to sort of parse out what this is really going to take.

We need to almost quadruple the amount we’re going to spend. But most of that is going to come from the private sector. The government’s role here is to de-risk the technologies that the private sector doesn't trust yet, to build out the infrastructure and to create this sort of supportive investment ecosystem for the private sector to pick up these technologies and run with them. Because we’ve seen in the extraordinary growth in solar, wind, EVs and EV batteries in particular, that there is appetite in the private sector to do this, and we just need to get our act together and turn that 1.1 figure into a $4 trillion figure.”

Listen to the full episode here: