Pairing renewable energy targets with smart policies could unlock $20 trillion in energy savings by 2060
The RA+SDG scenario lifts 193 million from poverty, ensuring achievement of universal access to energy and clean cooking
The share of renewable energy also rises to 87.7% in global electricity production by 2060
A United Nations Development Programme (UNDP)-led study estimates that pairing renewable energy targets with supportive policies and investments could unlock $20 trillion in energy savings for the world by 2060, & lift 193 million people out of extreme poverty.
Time-bound targets could also cut emissions and deliver social benefits by boosting global GDP by 21% and raising per-capita income significantly, according to the findings of the study titled Charged for change: The case for renewable energy in climate action.
“Renewables can offer the chance to bring electricity to hundreds of millions of people, improving lives and driving growth. This study shows clean energy can unlock potential where it’s been held back for too long,” said Greg Jackson, Founder of UK-based Octopus Energy.
It simulates 3 scenarios – Base Case, Renewables Acceleration (RA), and Renewable Acceleration + Sustainable Development Goals or RA+SDG – to explore potential pathways to integrate renewable energy into national energy mixes and assess their quantifiable benefits. Their focus is primarily on solar and wind, while also touching upon hydro and geothermal sources.
For this purpose, the team assessed the Nationally Determined Contributions (NDC) of various countries under the Paris Agreement using the International Futures (IF) model of the University of Denver’s Pardee Institute.
As the name suggests, the Base Case scenario works on a business-as-usual pathway. It paints a ‘stark’ picture of the future. Following this path to an ‘unsustainable and unjust future’, only half of the world’s energy system will be powered by renewables by 2060, not enough to meet the climate goals. The share of renewables generation reaches 47.1% by 2060. It would also lead to 400 million with the lack of access to electricity and 700 million to clean cooking, thus stressing energy inequality.
Under this scenario, 380 million people will remain in extreme poverty, 240 million will face undernutrition, and 750 million will lack access to safe water and sanitation. This situation will also accelerate climate change, raising global temperatures by 2.6°C by 2060.
The RA scenario simulates higher renewable energy and energy efficiency ambition for countries, integrated within their climate plans. Renewable energy growth is driven by falling costs of the technologies and complementary policies. It accounts for 86.7% of total electricity production by 2060, up from 7.6% in 2024, bringing the world closer to a 1.5°C future.
It delivers modest economic and social benefits, leading to a $1.3 trillion increase in GDP and 23 million fewer people living in extreme poverty compared to the base case. Yet, this is not enough, as this scenario still leaves 232 million people facing malnutrition and 620 million lacking access to safe water and sanitation.
On the other hand, the RA+SDG scenario is the most optimized to lead to a ‘better and more just’ world. Aligned with the SDGs, it will have ambitious climate targets and policies in line with the Paris Agreement, with the aim of improving human development. The share of renewable energy in production rises to 87.7% by 2060 in this scenario.
The report writers estimate that this enhanced scenario helps achieve universal access to electricity and clean cooking, 193 million fewer people live in extreme poverty, 142 million fewer face malnutrition, and 550 million more gain access to safe water and sanitation relative to the Base Case scenario by 2060.
The levelized cost of electricity (LCOE) of solar goes down from $60/MWh in 2024 to $25/MWh in RA+SDG scenario, the lowest among all other technologies, including fossil fuels.
“Both scenarios (RA and RA+SDG) project nearly triple the renewable energy capacity from 3,700 GW in 2024 to 10,500 GW in 2030— almost reaching the global target of 11,000 GW,” reads the report. “These measures limit global warming to below 1.8°C under RA and cap it at 1.5°C under RA+SDG by 2060.”
For the world to realize the RA+SDG scenario, the report writers recommend a series of policy actions. These include phasing out fossil fuel subsidies and redirecting savings to renewable energy deployment, de-risking private sector renewable energy investment, fast-tracking project approvals for solar, wind and storage projects, and promoting debt-smart financing strategies, among other recommendations.
“Today, the world faces a dual challenge: advancing human well-being while mitigating the environmental impacts of fossil-fuel-driven development,” said Cassie Flynn, Global Director of Climate Change at UNDP. “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 complete study is available for free download on UNDP’s website.