G20 Governments are Spending Three Times as Much on Fossil Fuels as Renewables

September 30, 2024 – G20 governments are spending three times as much on fossil fuels as renewables, research by the International Institute for Sustainable Development shows.

In the first inventory of its kind, IISD tracked the public financial support G20 governments delivered to renewable power, grids, and storage over the past 4 years. In 2023, that renewable support was at least USD 168 billion, compared to an estimated USD 535 billion in fossil fuel subsidies.

The vast majority (95%) of this renewables support was delivered by rich countries and China. EU countries collectively invested USD 340 billion in renewables over 2020–23, with Germany leading the way and putting 1.04% of its GDP into the sector. The United States delivered USD 140 billion and China USD 119 billion. Many emerging economies are at risk of getting left behind in the clean energy transition.

“The falling cost of renewable technologies does not mean governments can get complacent,” says Tara Laan, IISD lead on incentivizing renewables. “They need to scale up public financial support to accelerate the clean energy transition and extend the benefits to all.”

To meet a global goal to triple renewable energy capacity by 2030, the International Energy Agency estimates that investment in the sector needs to double from current levels of around USD 1.1 trillion per year. Assuming the relationship between public and private investment remains consistent, G20 governments may need to double their financial support to facilitate this.

Strategic support for renewables is good value for taxpayers. It delivers cheap, safe, clean energy and reduces exposure to geopolitical risk. In G20 countries in 2023, every dollar in public support for renewable power and integration leveraged over 6 dollars of investment. Globally, the ratio of subsidies to total investment in fossil fuels was around 3:4—meaning that every 3 dollars of government subsidies (for production and consumption) leveraged only one additional dollar of investment.

Public financial support can have the most impact when it addresses barriers to deployment like high borrowing costs, grid bottlenecks, and storage needs.

Indira Urazova, policy analyst at IISD, says: “Tipping points theory tells us that governments can speed up the energy transition through strategic policy interventions. Despite rapid progress in some countries, deployment of renewables remains slow in most of the developing world. Public financial support will be crucial to accelerate the transition worldwide.”

To close the investment gap for renewables, G20 governments can 

• align national targets for renewable deployment with the global tripling pledge, backed by implementation plans, and include those plans in the next round of national climate plans (NDCs) due for submission to the UN climate body in early 2025; 
• level the playing field by eliminating fossil fuel subsidies in a socially responsible way; 
• channel aid and international public finance to renewable energy deployment in lower-income countries, including through the new climate finance goal under negotiation in this year’s UN climate conference (COP 29). 

Notes for Editors 

1. Public Financial Support for Renewable Power Generation and Integration in the G20 Countries 
2. Unlocking Clean Power for All: How tipping points theory can guide effective use of public funds 
3. COP28: Global Renewables and Energy Efficiency Pledge 

Media Contact

Megan Darby, senior communications officer, IISD: mdarby@iisd.org