During the last decade, there have been three times as much investment in renewable energy as there has been in fossil fuels, emphasizing the decline of fossil fuels and the rise of clean energy.
According to a report published by Imperial Business School and the International Energy Agency (IEA), this is the case.
The study investigates the clean energy investment case by looking at the performance of publicly-traded renewable energy and fossil fuel firms in four categories. Global markets, advanced economies, emerging markets and developing economies, and China are the four categories.
Over the last ten years, renewable energy investment has outperformed fossil fuel investment in all four categories. In the global and advanced economy sectors, fossil fuel portfolios were far more volatile each year, whereas renewable portfolios showed more consistent performance.
The findings show that renewable energy has a stronger risk-to-reward profile in both normal market conditions and during periods of world economic turbulence. According to the report, the renewable investment market fared better during the pandemic than fossil fuels.
As per the report, despite the improved performance, there is still a significant gap between government targets and total renewable energy investment.
It emphasizes the importance of governments, businesses, and the financial community all contributing to the development of projects and providing the capital required to address clean energy investment.
Dr Charles Donovan, Executive Director of the Centre for Climate Finance & Investment at Imperial College Business School, said: “Our research demonstrates that all over the world renewable power has outperformed fossil fuels.
“It’s been the same story for more than a decade, yet total investment is still lagging. National regulators, particularly in the United States, must get to work on the reforms needed to level the playing field for clean energy investors.”