Fast-Tracking Renewables Could Save the World $20 Trillion, Says New Report

A global push for renewable energy, combined with bold policies to tackle poverty and improve livelihoods, could unlock more than $20 trillion in energy sector savings and boost global GDP by 21% by the year 2060. That’s according to a new study published by the United Nations Development Programme, Octopus Energy, and the Pardee Institute at the University of Denver.

The study provides a critical examination of the risks associated with maintaining the status quo in sustainable development and energy reform. Then, it paints a radically different picture of what’s possible if the world chooses a different path.

Currently, under the existing set of government policies, fossil fuels are still projected to account for more than half of all primary energy production by 2060. Energy systems will remain inefficient. Ageing grids and under-investment in infrastructure will continue to slow down the shift to renewable power, leaving many communities without reliable access to clean energy.

Furthermore, emissions from power generation, transportation, industrial operations, and buildings will drive global temperatures well beyond the limits set by the Paris Agreement. The knock-on effects? Major setbacks in critical areas like clean water, education, nutrition, and basic health services. The report doesn’t sugarcoat it: the gap between today’s reality and a sustainable, equitable future is still vast. But it also offers hope.

Suppose the world accelerates deployment of wind, solar, and geothermal energy, and scales up electrification of heating and cooking, while introducing smarter, people-focused policies. In that case, a very different outcome is within reach.

In this scenario, global energy intensity would be halved, and fossil fuels would account for just 11.5% of primary energy production by 2060. While energy demand is expected to increase in low-income and developing countries, improvements in efficiency in wealthier nations will more than offset the global impact.

The payoff would be huge. The world could save $20.4 trillion between now and 2060. Of that, $8.9 trillion would come from efficiency gains in the energy system itself. The remaining $11.5 trillion would stem from lower costs of renewable energy. And that doesn’t even account for the climate disasters and economic damage that would have been avoided by cutting emissions.

Still, the study warns that transitioning to renewables alone won’t automatically solve deep-rooted issues like poverty or inequality. To truly deliver on the promise of a just transition, the report outlines several must-haves.

These include stronger governance, reinvesting energy savings in development, progressive carbon taxes in wealthier nations, the global phase-out of dirty cooking fuels, universal access to electricity, and significant investments in areas such as education, health, family planning, infrastructure, and reforestation.

If implemented correctly, this approach could lift nearly 200 million people out of extreme poverty, prevent 142 million from becoming malnourished, and provide access to clean water and sanitation for an additional 550 million people. Electricity access would become universal.

“Today, the world faces a dual challenge: advancing human well-being while mitigating the environmental impacts of fossil-fuel-driven development,” said UNDP’s global director of climate change, Cassie Flynn.

“This study shows us that a clean energy future is possible – but we must choose to embed renewable ambition into climate plans linked to inclusive development policies.”

The report urges governments to set their sights higher as they revise their Nationally Determined Contributions, the climate action plans each country submits under the Paris Agreement. These updates are expected ahead of COP30, the next major UN climate summit, set to take place in Brazil this November. As of the original February deadline, only 13 countries had submitted their updated plans.

The Climate Crisis Advisory Group recently echoed this urgency, calling on leaders to view NDCs not as regulatory chores but as strategic blueprints for long-term economic growth.

In a related development, researchers from Exeter, Cambridge, and Manchester have found that the UK could reap significant cost and efficiency benefits in the power and transport sectors by 2035, simply by sticking to a strong renewable transition.

The ripple effect could be transformative. Cheaper power and cleaner transport options would cut costs for businesses, public services, and households across the board. But that only happens if lower energy prices are passed on to consumers, rather than being absorbed into corporate profits.

Currently, energy providers are enjoying substantial margins. End Fuel Poverty reports that energy firms raked in over £115 billion in profit during the 2023–24 financial year, up sharply from £37.4 billion in 2019–20.

The study's authors are pushing for significant reforms. One key recommendation is decoupling electricity prices from volatile wholesale gas prices, a setup that currently prevents consumers from benefiting when solar or wind energy gets cheaper.

The UK government first announced its intention to explore this change under the leadership of Boris Johnson. Labour has said it will stick to that pledge, though it has yet to provide a clear timeline. So far, it has focused instead on reforming electricity bill levies for major industrial users, such as cement and steel producers.