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'Major investment' needed to meet energy needs by 2035

An estimated $48 trillion (£28.72 trillion) is needed to ensure the world's energy demands continue to be met by 2035, according to a new report.

The International Energy Agency (IEA) has revealed the significant amount as part of its World Energy Outlook programme.

It means that the current annual investment of finding, establishing and maintaining fuel sources will have to be increased from $1.6 trillion to $2 trillion, while the proportion of cash being used to implement energy efficiency measures across the globe is also required to rise from $130 billion per year to $550 billion.

According to the report, 90 per cent of the sum set aside for energy efficiency will be spent on buildings and transport, suggesting the widespread installation of eco-friendly improvements like solid wall insulation could make a significant difference. 

The agency is now calling on governments to get behind the study and take the necessary action to ensure a situation where there isn't enough energy to power the population is averted.

IEA chief economist Fatih Birol said: "Policy makers face increasingly complex choices as they try to achieve progress towards energy security, competitiveness and environmental goals.

"These goals won’t be achieved without mobilising private investors and capital, but if governments change the rules of the game in unpredictable ways, it becomes very difficult for investors to play."

However, the plan drawn up by the IEA still fails to meet global climate change targets, meaning the environment would likely continue to destabilise over the next two decades. In order for this to be rectified, it's estimate around $53 trillion would need to be invested - $5 trillion more than the previous figure.

In this scenario, an investment of $15 trillion in improving energy efficiency would result in an estimated 15 per cent reduction in power consumption.

Posted by Simon Webster