Governments earmarked almost $2 trillion in direct investment support for clean energy since 2020: IEA

Governments around the world have earmarked almost $2 trillion in direct investment support for clean energy since 2020, a new International Energy Agency (IEA) report revealed.

The first edition of the report, State of Energy Policy 2024, said this is almost triple the amount committed following the 2007-08 financial crisis. The report found that around 80 per cent of direct government spending allocated was in China, the European Union and the United States.

Government support and incentives for clean energy technologies have reached new highs as policymakers place renewed focus on energy security in the wake of multiple crises in recent years, according to the report.

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Domestic manufacturing incentives for clean energy are one area of public investment that continues to grow substantially, accounting for almost 10 per cent of total government spending since the beginning of the decade, with low-emissions vehicles, hydrogen and batteries receiving the largest allocations. At the consumer level, the report finds that the cost of short-term government support totalled $940 billion at the height of the global energy crisis, the report noted.

"The unprecedented level of policy and investment support for clean energy is a recognition that these technologies not only reduce emissions but help safeguard energy security," said Laura Cozzi, IEA Director of Sustainability, Technology and Outlooks. "The increase in trade policies and domestic manufacturing incentives also signals that clean energy is becoming central in industrial policies."

Energy performance standards are another area where policy intervention has grown significantly in recent years. In 2023 alone, 35 countries - representing 20 per cent of global greenhouse gas emissions - passed new energy performance regulations.

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The first edition of the report provides the most comprehensive and up-to-date global picture of energy policies by country and sector, highlighting the most substantial changes in the past 12 months. This includes a publicly available repository - the Energy Policy Inventory - which contains over 5000 energy-related policies worldwide across areas such as government spending, regulation and trade.