Catalyzing investment for advanced energy technologies

The world crossed a key climate threshold in 2024, surpassing 1.5°C above pre-industrial levels and becoming the warmest year on record. While the impacts of climate change on societies and asset portfolios remain profound, the urgency of that challenge is increasingly matched by near-term geopolitical and economic imperatives. Rising volatility in global energy markets, geopolitical instability, evolving industrial policy, a turbulent inflationary environment, and rapidly rising electricity demand—including from artificial intelligence and advanced manufacturing—are reshaping the investment landscape.

Scaling clean energy technologies and building out the infrastructure is no longer just an environmental necessity—accelerating that process is also necessary for achieving other critical goals such as driving national competitiveness; mitigating exposure to volatile fossil fuel markets; and nurturing sectors that can deliver compounded returns and lower energy costs. Doing so requires mobilizing enormous amounts of capital that conventional markets fail to provide in time or in risky markets. There is not enough public capital to do the job, but there is a strong case for using investment finance to crowd in private capital, speed-up scaling and deployment, and achieve critical policy goals.

This Economist Impact report, supported by the EFI Foundation and informed by a global investor survey and expert interviews, examines the barriers slowing capital deployment into clean energy technologies and the catalytic mechanisms that can help to overcome them. The survey, conducted in the aftermath of the 2024 US elections, covered 300 investor leaders across North America, Europe, Asia-Pacific and the Middle East.