World energy transitions outlook 2023: 1.5°C pathway, volume 2

This second volume of the 2023 Outlook, based on IRENA’s macro-econometric modelling work, provides policymakers with insights into how economic activity, employment and wellbeing may be affected under the 1.5°C pathway, compared to current policy settings. The world faces a series of unprecedented and intertwined crises that pose serious challenges to the stability of economies and societies. Individually, fossil fuel price shocks, climate change, biodiversity loss and socio-economic inequality are all serious issues; but the interactions between them amplify their effects. It is becoming increasingly urgent to accelerate the transition to a more sustainable global energy sector and economy. To date, policymakers have concentrated on the technological, institutional, regulatory and policy facets of the energy transition, with limited attention to its socio-economic implications. This report contends that current transition narratives may not resonate with all stakeholders, largely due to their omission of central socio-economic dimensions. Bridging gaps in climate policy ambition and fostering essential structural changes necessitates unparallel global collaboration.