Global Surge In Clean Energy Policies: IEA Report Highlights Trends And Investments

Governments worldwide are implementing a range of clean energy policies to take advantage of the growing new energy economy. A new report from the International Energy Agency (IEA) provides the first comprehensive global overview of the policies countries are using to promote clean energy transitions and improve energy security.

According to the report, titled State of Energy Policy 2024, government support and incentives for clean energy technologies have reached unprecedented levels. This renewed focus on energy security has come in response to various crises faced in recent years. The report includes the Energy Policy Inventory, which features over 5,000 energy-related policies from around the globe, covering areas such as government spending, regulations, and trade.

Since 2020, nearly $2 trillion has been set aside by governments for direct investment in clean energy, which is almost three times the amount committed after the 2007-08 financial crisis. About 80% of this funding has been allocated in China, the European Union, and the United States. One notable area of growth is domestic manufacturing incentives for clean energy, which now account for nearly 10% of total government spending since the start of the decade. The largest amounts have gone to low-emission vehicles, hydrogen, and batteries. High-profile initiatives include the United States’ Inflation Reduction Act, India’s Production-Linked Incentive, and Brazil’s Green Mobility and Innovation Programme, with other nations adopting similar policies.

At the consumer level, the report highlights that short-term government support reached $940 billion during the peak of the global energy crisis. While many emergency measures have been relaxed, government programs aimed at addressing ongoing affordability and competitiveness are still active. These programs specifically target the upfront costs associated with adopting clean energy technologies.

Laura Cozzi, the IEA’s Director of Sustainability, Technology, and Outlooks, stated that the unprecedented support for clean energy reflects a recognition that these technologies not only cut emissions but also enhance energy security. The rise in trade policies and domestic manufacturing incentives shows that clean energy is becoming a key component of industrial policies.

The report also notes that clean energy supply chains, particularly for solar PV, wind, batteries, and electrolysers, are concentrated geographically. In response, there has been a stronger policy focus on supporting local manufacturing and supply chain security. Since 2020, nearly 200 new trade measures related to clean energy technologies have been introduced, a significant increase from fewer than 40 in the previous five years. Changes include adjustments to import tariffs, anti-dumping duties, and offsetting measures, with about 40% of clean energy trade policy changes since 2020 attributed to these factors.

Energy performance standards have also seen a rise in policy intervention in recent years. In 2023 alone, 35 countries, responsible for 20% of global greenhouse gas emissions, enacted new energy performance regulations. However, some countries have rolled back certain regulations, such as those banning the sale of new fossil fuel boilers and internal combustion engine vehicles, as well as plans to phase out unabated coal. These rollbacks impacted around 1% of global emissions but were outweighed by increased regulatory stringency in other regions.