Increasing renewable energy would increase GDP, says report

A new report from the International Renewable Energy Agency (IRENA) claims that a 36% share of renewable energy in the global energy mix by 2030 would increase global gross domestic product (GDP) by up to 1.1%, or $1.89 trillion.

‘Renewable Energy Benefits: Measuring the Economics’ outlines the benefits that would be achieved under the scenario of doubling the global share of renewable energy by 2030 from 2010 levels. According to IRENA Director-General Adnan Z Amin, “Achieving the needed energy transition would not only mitigate climate change, but also stimulate the economy, improve human welfare and boost employment worldwide.”

Improvements in human welfare would go beyond gains in GDP, according to the report, thanks to a range of social and environmental benefits. The impact of renewable energy deployment on welfare is estimated to be three to four times larger than its impact on GDP, with global welfare increasing as much as 3.7%. Employment in the renewable energy sector would also increase — from 9.2 million global jobs today to more than 24 million by 2030.

The report finds that Australia would benefit particularly well from a higher investment in renewable energy, owing to the reduced health impact of coal pollution and an increase in its own GDP of 1.7%. Climate Council CEO Amanda McKenzie added that Australia’s water withdrawals in 2030 could decline by more than a quarter.

“Solar and wind energy uses up to 200 times less water than conventional power options such as coal and gas,” she explained.

A transition towards greater shares of renewables in the global energy mix would also cause a shift in trade patterns, as it would more than halve global imports of coal and reduce oil and gas imports. Fossil fuel-exporting countries would also benefit from a diversified economy.

“Australia will still be one of the world’s powerhouses,” said McKenzie. “But instead of trading in resources that are bad for our health and bad for our climate, we’ll be building and sharing renewable technologies that will power a healthy future and a healthy climate.”

“Mitigating climate change through the deployment of renewable energy and achieving other socioeconomic targets is no longer an ‘either or’ equation,” concluded Amin. “Thanks to the growing business case for renewable energy, an investment in one is an investment in both. That is the definition of a win-win scenario.”