London Climate Action Week: Climate Finance Key to Net Zero

How to finance the net zero transition amid rising global demand

Tim Gould, Chief Energy Economist, International Energy Agency adds context by emphasising how the world’s energy demand increased 2% in 2024.

“The International Energy Agency perspective in terms of the energy component of the journey to net zero is that there is indeed still a long way to go,” says Tim. “When we look at the numbers for 2024, global energy demand increased by about 2%. 

“If we are going to bring down emissions we need to be meeting all of that incremental growth, and then some, with non-emitting energy sources. But when we look at the actual composition of how we met that growth in energy demand last year, the largest share was from renewables at around 40%, with another 8% or so arising from an increase in nuclear energy. 

“But that means that the majority of the growth in energy demand last year was nonetheless met by oil, natural gas and coal – which is why we continue to see an ongoing increase in annual emissions. 

“We track all of the capital flows that are going into the energy sector each year and we recently released our own sense of how much capital is going into the energy sector this year, and in our view it’s going to be around US$3.3tn invested in different parts of the energy sector in 2025.

“Two thirds of that investment is going into renewable energy, nuclear energy, grids, storage, low emission fuels, improvements in energy efficiency and electrification – all of which helps to move the energy transition forward.

“When we look at the numbers for different parts of the energy sector, there are very important signs of change. Without the accelerated deployment of five key low emission technologies (solar, wind, heat pumps, electric vehicles, nuclear) over the last five years, global emissions would be 7% higher than where we are today.”