Accelerating the Energy Transition: Unpacking the Business and Economic Cases

The document argues that while the broad economic case for the energy transition is strong, a gap exists in translating these societal benefits into bankable business cases for private investors. To reach a required annual investment of over $5 trillion by 2030, the paper identifies key enablers including public support, technology readiness, pricing mechanisms to offset 'green premiums', predictable demand signals, affordable capital, and policy credibility. It highlights the specific challenges faced by emerging market and developing economies (EMDEs), where high capital costs and low sovereign risk ratings hinder investment. The paper advocates for coordinated public-private action, innovative financing, and stable regulatory frameworks to accelerate the deployment of advanced energy solutions.

• To align with a 1.5°C pathway, annual clean technology investments must increase from $2 trillion in 2024 to over $5 trillion by 2030, leaving a $3 trillion gap.
• Achieving net-zero by 2030 requires massive scaling of specific advanced energy solutions: clean hydrogen production must grow 70-fold, sustainable aviation fuel (SAF) 190-fold, energy storage 35-fold, and carbon capture and storage (CCS) 20-fold.
• In most countries, the International Monetary Fund (IMF) estimates that up to 90% of funding for energy demand, supply, and finance sectors must be sourced from international private capital.
• A significant 'green premium' persists for emerging technologies; for instance, SAF is expected to be two to three times more expensive than kerosene by 2030, potentially increasing flight ticket prices by 18% to achieve a 50% emissions reduction.
• Private investment in emerging market and developing economies (EMDEs) is severely constrained by risk; approximately 74% of low- to medium-income countries have sovereign risk ratings of B+ or lower, which typically deters private foreign investors.
• Financial viability for new projects often depends on strict bank requirements, such as securing offtake agreements that cover at least 75-80% of production capacity.
• Policy frameworks like the US Inflation Reduction Act (IRA) and the EU Taxonomy are cited as examples of how clear signals and standards can drive private sector investment and corporate confidence.

APA

World Economic Forum (2025). Accelerating the Energy Transition: Unpacking the Business and Economic Cases. https://reports.weforum.org/docs/WEF_Accelerating_the_Energy_Transition_2025.pdf

Chicago

World Economic Forum. Accelerating the Energy Transition: Unpacking the Business and Economic Cases. 2025. https://reports.weforum.org/docs/WEF_Accelerating_the_Energy_Transition_2025.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Accelerating the Energy Transition: Unpacking the Business and Economic Cases |date=January 2025 |url=https://reports.weforum.org/docs/WEF_Accelerating_the_Energy_Transition_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2025accelerating, author = {{World Economic Forum}}, title = {{Accelerating the Energy Transition: Unpacking the Business and Economic Cases}}, institution = {World Economic Forum}, year = {2025}, month = jan, url = {https://reports.weforum.org/docs/WEF_Accelerating_the_Energy_Transition_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }