Supercharging the new energy era of renewables, efficiency, and electrification.

 

The year 2015 marked a turning point in global climate governance, with the adoption of the landmark Paris Agreement at COP21. It has an overarching goal of holding the increase in global average temperature relative to pre-industrial levels to well below 2°C and pursuing efforts towards 1.5°C. Subsequent COPs have resolved to limit the temperature increase to 1.5°C, recognizing that this would significantly reduce the risks and impacts of climate change compared to 2°C. At COP28, Parties delivered a comprehensive vision for a 1.5°C-aligned energy system transformation, establishing global targets that include tripling renewable energy capacity by 2030, doubling the annual rate of energy efficiency improvements by 2030, and transitioning away from fossil fuels in line with global net-zero emissions by 2050, with accelerated near-term action. The collective ratcheting up of global climate ambition and action over the last ten years means that projected global warming has been progressively declining.ii According to the UNEP Emissions Gap Report series, between the 2015 and 2024 assessments, the maximum level of global warming within this century under a current-policies scenario fell from just below 4°C to 3.1°C. Meanwhile, under a scenario in which Parties’ conditional nationally determined contributions (NDCs) are fully implemented, projected global warming fell from 3–3.5°C to 2.6°C, and lower still to 1.9°C if net-zero pledges are also fully achieved. The strengthening of international and national climate policies has created positive multiplier and spillover effects, catalyzing commitments and action by sub-national and non-state actors, driving low-carbon technological innovation and adoption, and stimulating economies to decarbonize. Bhutan was the first country to set a net-zero target in 2015. As of June 2025, 141 countries, 284 cities, and 1,191 companies had set net-zero targets, covering at least 76% of global GHG emissions and 78% of global GDP.

 Between 2015 and 2023, the coverage of global GHG emissions with carbon pricing approximately doubled from 12% to 25%. Major global milestones such as the issuance of the first Intergovernmental Panel on Climate Change (IPCC) report in 1990 and the adoption of the Paris Agreement in 2015 have boosted the impact of domestic policies on green patent filings. Over the past few decades, the climate imperative has been instrumental in helping to drive innovation and investments in renewable energy technologies, spurring them to reach economies of scale.iv Experts believe that solar, wind, and EVs have irreversibly crossed a positive tipping point and entered a virtuous cycle of cost decline and widespread adoption. The cost of utilityscale solar PV has fallen by 80–90% each decade since 1960, whereas the costs of fossil fuels are highly volatile and show no long-term decrease. New solar PV has been undercutting new coal- and gas-fired power plants in most of the world for six years, and the gap in their average lifetime electricity generation costs continues to widen in favour of solar. Meanwhile, global manufacturing capacity of renewable energy technologies is outstripping demand: announced solar PV and battery projects can already cover the global deployment needs of the tripling renewable capacity by 2030 goal.  The IEA projects several significant renewable energy milestones to be reached in the power sector in the next five years. In 2025, renewablesbased electricity generation is set to overtake coal-fired generation for the first time. Non-fossil fuel sources are expected to meet all global demand growth out to 2027, with renewables set to meet around 95%. Solar and wind power generation are both set to surpass nuclear in 2026. In 2029, solar PV electricity generation is expected to surpass hydropower to become the largest single renewable power source, and wind will surpass hydropower in 2030. While economic pragmatism and energy security concerns will now drive the transition away from fossil fuels to renewables, progressive policies — as well as greater international cooperation — will be vital to dismantle barriers and accelerate progress, and to ensure a just, orderly, and equitable transition in line with delivering on the Paris Agreement and SDGs. At the same time, the economic case for accelerating climate action to minimize damages has never been clearer. Extreme weather events are intensifying in frequency and ferocity, devastating lives, livelihoods, and economies, disrupting supply chains, increasing the debt burden of developing countries, and driving up the cost of living across the world. In 2024, economic losses due to weather-related extreme events were estimated to be USD 320 billion, of which 56% were uninsured. Study after study has shown that the cost of inaction is far greater than the cost of action. For example, recent analyses by the Network for Greening the Financial System estimate that climate damages could result in regional economic losses amounting to 6% of GDP in Asia and up to 12.5% in Africa over the next five years; by 2050, losses could reach 15% of GDP globally. Without further action, climate impacts will intensify and continue to reshape economic and financial systems, jeopardizing longterm development and security, especially in vulnerable countries. The latest assessments from the World Meteorological Organization (WMO) found that 2024 was the warmest year in the 175- year observation record, and likely the first in which the 12-month average exceeded 1.5°C above preindustrial levels. Between 2025 and 2029, there is now an 86% chance that at least one year will be warmer than 1.5°C, and a 70% chance that the fiveyear average will also exceed 1.5°C. Despite these long-standing and increasingly stark warnings, global carbon dioxide (CO2) emissions from fossil fuels continue to hit record high levels.

Ten years on from the Paris Agreement, 2025 must mark another pivotal turning point: the year in which we seize the opportunities and solutions at hand to kickstart a decade of accelerated clean energy implementation and finally peak and reduce global emissions — especially from the energy sector. This special report aims to synthesize the latest evidence for the economic imperative and benefits of accelerating the transition away from fossil fuels to clean energy with a particular focus on renewables, electrification, and energy efficiency. While these three solutions will play central roles in the clean energy system of the 21st century, they do not represent the full picture, and this report does not aim to comprehensively capture all dimensions of the energy system transformation needed to deliver on the Paris Agreement’s goals. Section 2 provides an assessment of the current state of play of thetransition. Section 3 summarizes the socioeconomicbenefits of accelerating the transition, while Section 4 highlights the key barriers and challenges of thecurrent transition. Section 5 highlights priority action areas for accelerating a fast, fair, and fundedtransition to deliver a safe, resilient, and prosperousfuture for all. 

The term “renewable energy” refers to both “infinite” renewable sources such as solar, wind, hydropower, and geothermal as well as “cyclical” sources such as modern biofuels — consistent with the UN International Recommendations for Energy Statistics. The definition of “clean energy” can vary among the cited data and references but generally refers to sources that produce little to no GHG emissions during energy generation. For example, the IEA’s definition of clean energy technologies includes renewable power, EVs, heat pumps, energy efficiency measures, and nuclear. Please refer to the citations for details. Given the variety of data sources analyzed and cited throughout the report, some minor discrepancies can exist between datasets from different institutions. This report reflects data finalized as of 24 June 2025. The term “clean cooking” defines cooking solutions that achieve ISO Tier 4 and 5 of the multi-tier frameworks for clean cooking or technologies that attain the fine particulate matter and carbon monoxide levels recommended in the WHO’s global air quality guidelines. Clean cooking fuels and technologies include stoves powered by electricity, LPG, natural gas, biogas, solar, and alcohol. Renewables-based clean cooking solutions narrow down the specificity of the clean cooking definition to encompass only technologies that utilize renewable fuel sources. These include biogas, bioethanol, solid biomass, and renewables-based electricity. Electricity capacity refers to the maximum amount of output that an electricity generator can physically produce (or accept in the case of an electricity storage device), and is typically measured in watts (W). Electricity generation refers to the amount of output that is actually generated over a given period of time and is typically measured in kilowatt-hours (kWh). (1 kW = 1,000 W, and 1 kWh is one hour of using electricity at a rate of 1,000 W.) LCOE represents the average cost of electricity generation from a technology considering all costs incurred over its lifetime, including upfront investment, financing costs, operation and maintenance, fuel costs, and carbon pricing where relevant. It is often used as a metric for power plants and can also be used for the average cost of battery storage, if the charging costs are considered as fuel costs. It can be applied to battery storage in stand-alone applications or when paired with other technologies, such as solar PV. For technologies that operate in similar ways, the LCOE provides a common and suitable metric for comparison. FDI is defined as an investment involving a longterm relationship and reflecting a lasting interest and control by a resident entity (the foreign direct investor or parent enterprise) of one country in an enterprise (foreign affiliate) resident in a different country. FDI can take the form of either greenfield investment or a merger or acquisition. Greenfield FDI is new investment made by setting up a new foreign affiliate. On fossil fuel and clean energy employment statistics, the IEA’s estimates include the direct employment effects of investment and activity in the energy supply sectors (e.g. oil, gas, power) and energyusing technologies (e.g. heat pumps, vehicles). They also include indirect jobs generated through the manufacture, construction, and installation of core energy-supplying and energy-using facilities and devices. For the renewable sector specifically, the estimates by IRENA and ILO include direct jobs generated by renewable energy deployment (e.g., rooftop solar installations) and indirect jobs from activities in the upstream and midstream industries that supply and support the core activities of renewable energy deployment (e.g., manufacturing, construction, and operation of facilities).