Green Energy in Emerging Economies: Renewable investment, capacity growth, and future outlook

There are two main factors that will drive the growth of renewable energy in emerging markets over the next two decades. The first is rapid economic and energy consumption growth in non-OECD countries that will need to be fed by expanded power generation markets. Governments will increasingly be looking to develop renewable energies to avoid power shortages that would stunt development and therefore mitigate government objectives of raising living standards. Global economic and energy demand growth will be concentrated in developing economies, so there is much potential for the role of renewable energies in emerging markets to expand over the next two decades. Although conventional forms of energy will still dominate the energy mix, the expansion of power-generating capacity in emerging markets will at least partly be supplied by growth in wind, solar, bio and hydropower (and to a lesser extent geothermal power in countries which have those resources). The second is the overall policy environment regarding environmental issues generally and the threat of climate change specifically. The BRIC - Brazil, Russia, India and China - countries and other emerging markets are facing the twin challenges of promoting economic growth while mitigating the environmental impact of their growth strategies. While there is criticism that countries such as India and China have balked from making more firm commitments to cutting their GHG emissions, both these countries nevertheless have prioritized renewable energy development as part of their strategy to reduce the carbon intensity of their respective economies per unit of GDP. Therefore, developing economies led by the BRIC countries are playing an increasingly crucial role, not just in the global economic order, but also in the climate change debate and in the dynamics of global energy supply and demand.