The rationale for building renewables in many of those countries may be related to lower costs of wind turbines and solar panels as much as it is a need to slash CO2 emissions as a way to tackle climate change, Liebreich said.
“It’s partly around favorable policy environments, but also energy shortages and high costs of electricity for businesses and consumers,” he said. “At these now-lower costs of wind and solar, it just makes sense to build those resources. Renewables in those countries are not just a question of slavering on subsidies — in many cases, subsidies are not needed at all.”
Though it may appear that falling oil prices would hurt investments in renewables, the report says that cheaper oil isn’t much of a concern for solar and wind. Oil prices may dampen investor confidence in some areas, but in most of the world, renewables investments do not compete with oil because crude is not widely used to generate electricity as most renewables are.
Usher said the private sector is investing in renewables at scale, and that’s significant for the upcoming climate talks in Paris in December, the 21st session of the Conference of the Parties, or COP 21.
“This is a very important year for the U.N., for the climate agreement we hope will be completed by the COP 21 in Paris at the end of the year,” Usher said. “It’s critically important that governments see some signaling from the private sector to change the industrial fabric of our economy.”