BAKU, Azerbaijan, October 17.
Accelerating the energy transition could deliver a cumulative gain
of about $47 trillion to the global economy by 2050, under a
scenario that limits global warming to 1.5 degrees Celsius.
This was reflected in the World Energy Transitions Outlook 2026
report, published on the website of the International Renewable
Energy Agency (IRENA).
According to the report, under this scenario, global gross
domestic product (GDP) would be, on average, about 1.1% higher
annually than it would be if current policies were maintained.
"In an alternative scenario involving a deeper energy system
transformation (DES), global GDP would be, on average, about 0.7%
higher through 2050 compared to the Planned Energy Scenario (PES).
The cumulative economic gain in this case is estimated at
approximately $32 trillion," noted IRENA.
The primary driver of this economic growth will be increased
investment in renewable energy, electrification, power grids, and
energy efficiency. These areas will stimulate development in
construction, manufacturing, engineering services, the power
sector, and business services.
At the same time, the structure of the economy will gradually
shift: the share of activities related to the extraction and
processing of fossil fuels will decline, while the production of
high-value-added equipment, the development of power
infrastructure, and the provision of services related to the energy
transition will become increasingly significant.
The report also noted that the development of renewable energy
could help lower electricity costs for end-users.
"By 2035, under the DES scenario, average electricity prices
will be approximately 9% lower than they would be under current
policies, and by 2050, this gap could widen to 15%. This is due to
an increasing share of renewable energy and a reduced dependence on
fossil fuel prices," the report mentioned.
According to IRENA estimates, by 2050, employment in the
renewable energy sector under the DES scenario will reach
approximately 84.2 million jobs—a 60% increase compared to a
scenario where current policies remain in place. The solar energy
sector will continue to be the largest employer, potentially
accounting for around 38.3 million jobs.
Overall employment in the energy sector is also expected to
grow, driven by investments in power systems, energy efficiency,
infrastructure, and new technologies.
At the same time, the report emphasizes that the economic
benefits of the energy transition will not be distributed evenly.
Countries with a well-developed industrial base stand to gain
significantly from manufacturing clean energy equipment and
providing related services.
Conversely, economies dependent on fossil fuels will face a more
challenging structural transformation as revenues from the
extraction and processing of these fuels, along with employment in
these sectors, decline.
Developing nations could also derive substantial economic gains
from such investments. However, IRENA pointed out that to do so,
they must build their own manufacturing capabilities and integrate
more actively into global value chains, rather than relying
primarily on the import of technologies.
In this context, the agency underscored the growing importance
of industrial policy. According to IRENA, countries should develop
competitive advantages at the national and regional levels by
investing in workforce training, production capacity, innovation,
and competitive industries, rather than attempting to build every
link of the global supply chain on their own.
