Global spending on energy transition hit a record of more than $500 billion in 2020, as countries continue to prioritise offsetting emissions and charting a greener economic recovery, according to a new report by the World Economic Forum.
Flows of finance into energy transition reached an all-time high of $501bn last year, up from $458bn in 2019, according to the WEF's Energy Transition Index 2021.
The index, which surveys 115 countries, benchmarks them on the basis of their energy system performance as well as their readiness for transition to a greener energy future.
Sweden retains its top position on the index for the fourth consecutive year, followed by Norway and Denmark.
The UAE ranks 64th globally following "steady improvement over the years" when it comes to accelerating the adoption of green technology. It ranked in the top 10 on 12 indicators measuring transition efforts. Saudi Arabia ranked eighth among other Arab countries on the index.
"I think there is a huge opportunity for the Middle East to leverage the infrastructure and the technological skill and the technical skills that the people in the region have to really play a critical role in [energy transition]," Roberto Bocca, WEF's head of energy and materials, told The National.
The UAE leads on stability of institutions and regulatory framework, which underpin energy transition, while its progress on "economic growth and energy security" remains strong, the report said.
The Emirates, which aims to increase its share of renewables in its energy mix to 50 per cent by 2050, can continue to lower its energy impact by targeting a reduction in carbon intensity of its mix and looking at ways to decouple economic growth from energy consumption.
Scores for the Middle East and North Africa region fell last year but the overall trajectory remains positive, the report said.
Eight out of the world's 10 largest economies have so far pledged to reach net-zero emissions targets by 2050. Around 92 of the 115 countries tracked by the index increased their aggregate score over the last decade, pointing to a "positive direction and steady momentum" in global energy transition.
However, at the same time, global carbon dioxide emissions are set for their second biggest increase in history, according to the International Energy Agency.
Carbon dioxide emissions are rising by 1.5 billion tonnes this year, driven by a strong rebound in demand for coal in power generation, the Paris-based institution said on Tuesday.
Renewable energy technologies attracted the most investment, while other sectors such as mobility, electrified heat, storage, and carbon capture and storage accounted for a smaller share.
"Only four economies have a net outflow of recovery fund to emission-reducing sectors," Mr Bocca said.
"So if you look at some of the data now, 60 per cent of allocation to energy transition relevant sectors have been directly or indirectly still supporting fossil fuel sectors," he added.
The issue was highlighted earlier this month by US climate envoy John Kerry, who called on multilateral development institutions such as the World Bank to move away from financing highly-polluting fuels such as coal. Mr Kerry urged countries to ramp up efforts to meet the Paris Agreement targets on capping emissions.
While carbon emissions are forecast to rise, the share of people without electricity has now fallen to 800 million, from 1.2 billion a decade ago, the WEF said in its report.
"Increasing renewable energy capacity has in particular helped energy importing countries achieve simultaneous gains on environmental sustainability and energy security," the report said.