Other efforts seek to change how the global economic system handles environmental challenges; these changes could provide some support for clean energy. For instance, the Natural Capital Declaration, launched at Rio+20, aspires to properly value the environment in financial transactions. In addition, the United Kingdom announced at Rio+20 that all 1,800 companies on the London Stock Exchange’s Main Market will be required to report their greenhouse gas emissions. Some groups are even calling for a replacement for the Gross Domestic Product, such as the Inclusive Wealth Index, which would provide a definition of wealth that encourages sustainable economic and social development.

These actions all represent an attempt to change the rules of the economic game: to place a dollar value on natural capital, to redefine what we mean by growth and prosperity, and to link economic performance with environmental sustainability. To the extent that these actions succeed, they will open more doors to clean energy investment and growth.

Assessing the Present and the Future of Energy

Rio+20 demonstrated one fact that energy experts have long known: energy is at the root of many sustainable development goals. Energy is also intertwined with land and water and comes into play when considering food production, conservation, purification, and distribution of water, and land use issues.

But as we try to look toward the future of global energy systems, we first need a clear assessment of where we are now and where we’re going. That’s the thinking behind the Global Energy Assessment (GEA), the result of a significant scientific effort over the course of four years. Released at Rio+20 by the International Institute for Applied Systems Analysis (IIASA), with significant contributions from authors at the National Renewable Energy Laboratory (NREL) and the Joint Institute for Strategic Energy Analysis (JISEA) authors, the GEA finds that shifting the global energy economy to one based on clean energy is economically viable, and the co-benefits to human health and the environment more than balance the up-front investments needed to bring about this transformation.

Within the deep analysis, the GEA provides a roadmap for realizing the Sustainable Energy for Allgoals and beyond. Strategically placed investments would enable the delivery of clean, sustainable energy to the 1.4 billion people living without electricity and to the 3 billion without access to modern cooking fuels or devices. This could be achieved without additional increases in greenhouse gas emissions.

The GEA analysis indicates that a rapid transformation to clean energy technologies would require an increase in annual investments from present levels of about $1.3 trillion per year to $1.7 trillion, which would be about two percent of current world gross domestic product. The difference corresponds roughly to the current energy subsidies that are often impeding the needed transformational change.

The GEA is indicative of the evolving framework needed to understand the future role of energy. With energy issues intertwined in issues of land use, water use, and food production, any analysis of energy requires a holistic approach. That’s also the thinking behind JISEA, of which I’m the executive director.

Operated by the Alliance for Sustainable Energy on behalf of NREL, the University of Colorado-Boulder, the Colorado School of Mines, Colorado State University, the Massachusetts Institute of Technology, and Stanford University, JISEA elucidates key insights in realizing a sustainable energy system and charting viable pathways across the value chains.

Seeing the future is never easy for investors or analysts. But a holistic approach to energy, environment and economics gives us the best chance of seeing our energy future clearly, which is essential to understanding the future of this planet.

Lead image: Wind turbines via Shutterstock