BAKU, Azerbaijan, October 17. Accelerating the energy transition could deliver a cumulative gain of about $47 trillion to the global economy by 2050, under a scenario that limits global warming to 1.5 degrees Celsius.
This was reflected in the World Energy Transitions Outlook 2026 report, published on the website of the International Renewable Energy Agency (IRENA).
According to the report, under this scenario, global gross domestic product (GDP) would be, on average, about 1.1% higher annually than it would be if current policies were maintained.
"In an alternative scenario involving a deeper energy system transformation (DES), global GDP would be, on average, about 0.7% higher through 2050 compared to the Planned Energy Scenario (PES). The cumulative economic gain in this case is estimated at approximately $32 trillion," noted IRENA.
The primary driver of this economic growth will be increased investment in renewable energy, electrification, power grids, and energy efficiency. These areas will stimulate development in construction, manufacturing, engineering services, the power sector, and business services.
At the same time, the structure of the economy will gradually shift: the share of activities related to the extraction and processing of fossil fuels will decline, while the production of high-value-added equipment, the development of power infrastructure, and the provision of services related to the energy transition will become increasingly significant.
The report also noted that the development of renewable energy could help lower electricity costs for end-users.
"By 2035, under the DES scenario, average electricity prices will be approximately 9% lower than they would be under current policies, and by 2050, this gap could widen to 15%. This is due to an increasing share of renewable energy and a reduced dependence on fossil fuel prices," the report mentioned.
According to IRENA estimates, by 2050, employment in the renewable energy sector under the DES scenario will reach approximately 84.2 million jobs—a 60% increase compared to a scenario where current policies remain in place. The solar energy sector will continue to be the largest employer, potentially accounting for around 38.3 million jobs.
Overall employment in the energy sector is also expected to grow, driven by investments in power systems, energy efficiency, infrastructure, and new technologies.
At the same time, the report emphasizes that the economic benefits of the energy transition will not be distributed evenly. Countries with a well-developed industrial base stand to gain significantly from manufacturing clean energy equipment and providing related services.
Conversely, economies dependent on fossil fuels will face a more challenging structural transformation as revenues from the extraction and processing of these fuels, along with employment in these sectors, decline.
Developing nations could also derive substantial economic gains from such investments. However, IRENA pointed out that to do so, they must build their own manufacturing capabilities and integrate more actively into global value chains, rather than relying primarily on the import of technologies.
In this context, the agency underscored the growing importance of industrial policy. According to IRENA, countries should develop competitive advantages at the national and regional levels by investing in workforce training, production capacity, innovation, and competitive industries, rather than attempting to build every link of the global supply chain on their own.