It would also increase GDP by 21 percent, and increase average per capita GDP by $6,000 by 2060, compared to a business-as-usual scenario.
The study, conducted by the United Nations Development Programme (UNDP), University of Denver’s Pardee Institute and Octopus Energy, set up to explore how time-bound renewable energy targets, backed by coherent policies and financing mechanisms, could unlock triple wins: cutting emissions, boosting economies and delivering real social benefits.
Although the development benefits of renewable energy and energy efficiency are widely recognised, it is less known to what degree they can offer quantifiable benefits when coupled up with broader policy measures. This includes the specific assessment of countries’ national climate plans under the Paris Agreement, or Nationally Determined Contributions (NDCs). To quantify the benefits of these national targets, the study simulated three scenarios and compared outcomes.
In the first scenario (the Base Case), the world continues on a business-as-usual pathway, failing to scale up ambition over time. The world’s reliance on fossil fuels remains moderately high by 2060, covering over 50 percent of primary energy production. Such a pathway is unsustainable, pushing global warming towards 2.6°C and threatening progress on energy access, education, safe water, sanitation and nutrition – potentially pushing hundreds of millions into extreme poverty.
The second scenario (achieving renewables acceleration) looks at what would happen if the renewable energy transition accelerated in line with the decision at the first global stocktake which calls on countries to triple renewable energy, double energy efficiency and phase out fossil fuels. In this scenario, the world’s reliance on fossil fuels is much lower, covering 12 percent of primary energy production by 2060. This pathway would put the world on track to limiting global average temperature rise to below 2°C.
Finally, the third scenario (achieving both renewables acceleration and development targets) builds on the renewable energy transition with system-wide investments and policies aligned with the Sustainable Development Goals (SDGs). Relative to a business-as-usual pathway, the third scenario is projected to achieve universal access to electricity and clean cooking, lift 193 million people out of extreme poverty, save 142 million people from facing malnutrition and give 550 million more people access to clean water and sanitation.
Coupling renewable energy targets with supportive development policies and investments would have major financial benefits as well. The third scenario could provide cumulative savings of $20.4 trillion – with $8.9 trillion coming from energy efficiency and another $11.5 trillion coming from lower renewable energy costs.
“Today, the world faces a dual challenge: advancing human well-being while mitigating the environmental impacts of fossil-fuel-driven development” said Cassie Flynn, Global Director of Climate Change at UNDP. “This study shows us that a clean energy future is possible – but we must choose to embed renewable ambition into climate plans linked to inclusive development policies.”
To meet the goals of the Paris Agreement, the world needs a rapid transformation of its global energy system towards cleaner, and more efficient forms of energy, alongside other critical areas, including adaptation, resilience and nature-based solutions. These transformations also need to happen in the context of a broader development framework, where renewable energy expansion unlocks dividends for human and economic development.
“Renewables can offer the chance to bring electricity to hundreds of millions of people, improving lives and driving growth” added Greg Jackson, Founder of Octopus Energy. “This study shows clean energy can unlock potential where it’s been held back for too long.”
Clean energy investments are set to reach a record-breaking $2.2 trillion in 2025, outpacing fossil fuels for the second year in a row. Renewable power capacity hit 4,448 GW, accounting for over 90 percent of new power additions. Technological advances in solar, wind, and storage are helping to drive this shift.
However, fossil fuels still dominate, making up over 70 percent of global energy supply. In 2024, global energy demand rose by 2.2 percent, and while renewables led this growth, fossil fuels still accounted for 54 percent of the increase. At the same time, energy efficiency improvements stalled, growing by just 1 percent - half the pace of the previous decade.
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