Clean Energy Spending Drops Most on Record as China Slows Growth
Global investments in renewable power dropped the most on record in 2016 as demand in China and Japan faltered.
Worldwide spending on clean energy fell 18 percent from 2015’s record high to $287.5 billion, according to a report Thursday by Bloomberg New Energy Finance. It was the first decline since 2013 and comes as environmental policies face pressure from populist movements that have fueled the rise of Donald Trump, the U.K. Independence Party and others.
Even as spending ebbs, the amount of wind and solar energy connected to power grids around the world continues to surge, gaining 19 percent in 2016, according to New Energy Finance. That’s in part because investors are getting more bang for their buck as competition and technological advances have dramatically reduced prices for photovoltaic panels and wind turbines.
“At the end of the day, investments in renewables are still outpacing conventional energy by two to one,” Michael Liebreich, founder of New Energy Finance, said in an interview. “But from a climate perspective, there is reason for concern over any slowdown.”
The decline comes as nations worldwide begin to implement policies established under the Paris accord to reduce greenhouse gases and stave off catastrophic flooding, drought and other extreme weather patterns linked to climate change. The total spending on clean energy in 2016 is more than 40 percent below the $484 billion in annual investments New Energy Finances estimates is necessary to displace enough fossil fuel plants and accomplish those goals.
Spending in China tumbled 26 percent to $87.8 billion from an all-time high in 2015. The slump comes as China’s electricity demand stagnates and the government reduces subsides for wind and solar power, lowering demand in a market accounting for about one-third of all global clean energy spending.
“China is really the driver of clean energy investment,” Abraham Louw, a New Energy Finance analyst, said in an interview. Spending in Japan slumped 43 percent to $22.8 billion.