While progress in the growth of zero-emission renewables is forecast to surpass previous estimates, the Bloomberg report also noted that greenhouse gas emissions will also continue to grow.
"Some $7.8 trillion will be invested globally in renewables between 2016 and 2040, two thirds of the investment in all power generating capacity, but it would require trillions more to bring world emissions onto a track compatible with the United Nations 2°C climate target," Seb Henbest, Bloomberg New Energy Finance analyst and the lead author of the study, said in a statement.
The U.N.'s 2°C climate target was part of a 196-nation agreement reached at the Paris conference in December to limit global warming to 2 degrees Celsius above pre-industrial levels by the year 2100.
In the new report, Bloomberg New Energy Finance stated that the U.N. 2⁰C climate target would require much more money to attain it.
"On top of the $7.8 trillion [in renewable investments], the world would need to invest another $5.3 trillion in zero-carbon power by 2040 to prevent CO2 in the atmosphere rising above the Intergovernmental Panel on Climate Change's 'safe' limit of 450 parts per million," Bloomberg stated.
Bloomberg New Energy Finance A worker climbs the stairs at a natural gas storage facility.
Onshore and offshore wind will see $3.1 trillion in new investments over the next two decades, while utility-scale, rooftop and other small-scale solar will get $3.4 trillion. Hydro-electric, already a well-established zero-emissions energy source, will receive an additional $911 billion in investments by 2040.
Bloomberg reduced its long-term forecasts for coal and natural gas prices by 33% and 30%, respectively, compared to last year's projection, reflecting a projected supply glut for both commodities.
But Bloomberg expects natural gas prices in the U.S. to more than double from 2016 to 2040, hitting $5.60 per million BTUs (British thermal units); coal prices, on the other hand, should fall in the near-term and then stay flat from 2020 to 2040 at $43 per ton, according to Colleen Regan, head of Environmental Markets in North America at Bloomberg New Energy Finance.
The cost of generating zero-emissions energy is also expected to drop precipitously. For example, the cost of generating a million watt hours (mWh) through onshore wind is expected to fall 41% by 2040, and solar photovoltaics will plummet by 60%, "making these two technologies the cheapest ways of producing electricity in many countries during the 2020s and in most of the world in the 2030s," the report said.
China, India to dominate fossil fuel investments
Over the next 25 years, new investments in fossil fuel power will total $2.1 trillion, predominantly in emerging economies. About $1.2 trillion will go into new coal-burning capacity, and $892 billion into new natural gas-fired plants.
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