To keep temperatures from rising to catastrophic levels, annual investments in non-fossil fuel energy in these Global South countries will need to jump from $260bn to nearly $2 trillion, the intergovernmental agency said in a report on Wednesday.

“Financing clean energy in the emerging and developing world is the fault line of reaching international climate goals,” IEA Executive Director Fatih Birol told journalists.

The report was released on the eve of the two-day Summit for a New Global Financing Pact in Paris, which seeks to galvanise support for revamping the mid-20th century architecture governing financial flows from rich to developing nations.

G20 nations are historically responsible for 80 percent of global carbon emissions, which are wreaking havoc on the Earth’s climate.

“Many vulnerable, lower-income states have been overwhelmed by economic shocks, debts they cannot pay, and the effects of climate change – a crisis to which they contributed very little, but which is costing people in these countries dearly,” Agnès Callamard, Amnesty International’s secretary general, said in a statement.

“These are unprecedented challenges that require a rethink of how the world’s financial architecture is set up.”

Private investment

Speeding the transition from dirty to clean energy and helping the Global South cope with and prepare for devastating climate impacts are high on the summit agenda.

Nearly 800 million people lack electricity and 2.4 billion have no access to clean cooking fuels, most of whom reside in poor and emerging countries.

Under current policy trends, one-third of the rise in energy use in these nations over the next decade will be met by burning fossil fuels, the main driver of global warming, the IEA warned.

According to Birol, investments in clean energy are increasing, but “the bad news is that more than 90 percent of that increase in clean energy since the Paris Agreement in 2015 comes from advanced economies and China.”

To unlock the potential for clean energy in emerging and developing economies, the report emphasized the need for greater international technical, regulatory and financial support.

Based on the IEA’s report, two-thirds of the financing for clean energy projects in emerging and developing economies excluding China “will need to come from the private sector” because public sector investments are “insufficient to deliver universal access to energy and tackle climate change”.

🗣”The investment needs go well beyond the capacity of public financing alone, making it urgent to rapidly scale up much greater private financing for clean energy projects in emerging & developing economies”

More from our Executive Director @fbirol 👉 https://t.co/0jWtZMO1Zb pic.twitter.com/fO6ILFCMuB

— International Energy Agency (@IEA) June 21, 2023

With China included in the calculation, private and public money pouring into renewables and other forms of carbon-neutral energy will need to more than triple from $770bn in 2022 to $2.5 trillion per year by the early 2030s.

Within the next decade, today’s $135bn in annual private financing for clean energy in these economies must rise to about $1 trillion a year.

Solar energy: Leading alternative

According to the IEA report, there is potential for rapidly ramping up renewable energy. Solar power is now the cheapest source of electricity generation across almost the entire world.

At least 40 percent of the global solar radiation reaching the planet lands on sub-Saharan Africa, and yet nearly 10 times more solar capacity was installed in China last year than across the entire African continent.

Sunny sub-Saharan Africa generates less solar electricity than the Netherlands, Birol noted.

Amnesty raised the issue that lower income countries “cannot fairly phase out fossil fuels, protect people from the harms of the climate crisis and provide remedy to those most affected”, especially when wealthier countries “continue to evade their obligations of international cooperation and assistance”.

The summit in Paris on Thursday should work to ensure wealthier nations “commit to comprehensive debt relief for lower-income nations” and “honour previous financial pledges they have failed to meet” in previous climate relief pacts, Amnesty said.

“This summit should offer a chance for global leaders to protect the rights of the world’s most marginalized people – not move the burden further onto those who are suffering the most but contributed the least to causing this crisis,” its statement added.