Paris Misaligned: An Assessment of Global Power Sector Investment

The report finds that while renewable energy investment is growing, continued funding for fossil fuel power plants and the presence of 'locked-in' emissions from existing assets keep the global power sector on a temperature trajectory exceeding 3.2°C. It highlights a significant gap between actual 2018 investment carbon intensities and the negative thresholds required by 2030 to achieve Paris alignment. The analysis identifies specific misalignments among major economies like China, India, and Japan, and among financial actors such as commercial banks and export credit agencies. The document recommends halting new carbon-intensive investments, accelerating the retirement of existing fossil fuel plants, and harmonizing climate risk reporting.

• In 2018, approximately 30% of new power sector investment was directed toward fossil fuel plants, which places the global trajectory on a temperature rise of over 3.2°C.
• The carbon intensity of new power investment in 2018 was 0.33 tCO2/MWh, which is 20% higher than the 0.27 tCO2/MWh required by 2030 to meet the IEA's 1.8°C Paris-consistent scenario.
• To achieve true Paris alignment, new investment must not only be zero-carbon but also compensate for 'locked-in' emissions from existing assets, meaning target carbon intensities for new generation are actually negative across all 22 analyzed regions and countries.
• At the country and regional level, less than 1% of new power investment is compatible with Paris-consistent decarbonization pathways, with 17% being 'extremely misaligned'.
• Major economies in Asia, specifically China, India, Japan, and South Africa, are on 'extremely misaligned' trajectories due to continued heavy investment in high-emissions fossil fuel power.
• Export Credit Agencies (ECAs) were the most misaligned investor type, with nearly half of their tracked power finance (USD 3.8 billion) funding coal projects and the highest asset carbon intensity of 0.64 tCO2/MWh.
• Commercial banks' power sector finance was 'very misaligned' in aggregate; while 82% of their project finance went to renewables, they provided significant funding for coal in Japan and Asia Pacific, and gas in the US and Southeast Asia.
• A significant portion of global power sector finance (41% of tracked finance, totaling USD 145 billion) comes from unknown sources and is 'extremely misaligned' with Paris targets.
• In the U.S. road transport sector, 98% of 2018 vehicle sales were internal combustion engine vehicles, placing new vehicle sales on a warming path of more than 2.7°C.

APA

Micale, V., Wetherbee, C., Macquarie, R., Rosane, P., & Naran, B. (2020). Paris Misaligned: An Assessment of Global Power Sector Investment. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/3.-Paris-Misaligned-An-Assessment-of-Global-Power-Sector-Investment-4.pdf

Chicago

Micale, Valerio, Cooper Wetherbee, Rob Macquarie, Paul Rosane, and Baysa Naran. Paris Misaligned: An Assessment of Global Power Sector Investment. Climate Policy Initiative, 2020. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/3.-Paris-Misaligned-An-Assessment-of-Global-Power-Sector-Investment-4.pdf.

Wikipedia

{{cite report |last1=Micale |first1=Valerio |last2=Wetherbee |first2=Cooper |last3=Macquarie |first3=Rob |last4=Rosane |first4=Paul |last5=Naran |first5=Baysa |title=Paris Misaligned: An Assessment of Global Power Sector Investment |publisher=Climate Policy Initiative |date=December 2020 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/3.-Paris-Misaligned-An-Assessment-of-Global-Power-Sector-Investment-4.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{micale2020paris, author = {Micale, Valerio and Wetherbee, Cooper and Macquarie, Rob and Rosane, Paul and Naran, Baysa}, title = {{Paris Misaligned: An Assessment of Global Power Sector Investment}}, institution = {Climate Policy Initiative}, year = {2020}, month = dec, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/3.-Paris-Misaligned-An-Assessment-of-Global-Power-Sector-Investment-4.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }