How clean energy is reshaping the economic landscape

In 2024, a staggering 528 gigawatts of renewable energy capacity, primarily solar and wind energy, were added to the global energy system, achieving two major impacts:

  • Helping to confront climate change and greenhouse gas emissions
  • Preventing fossil-fuel usage valued at $57 billion

When thinking about ways to combat climate change, clean energy often comes to mind. Clean energy, which encompasses energy sectors such as solar, wind, and nuclear energy, significantly reduces greenhouse gas emissions compared to more widely used yet more destructive fossil fuels like oil, coal, and natural gases.

But clean energy has many benefits besides improving our planet. In 2025, global investment in the renewable energy sector grew to $2.3 trillion. This significant influx of capital served as a primary driver for the global economy, accounting for almost 15% of all global GDP growth. In leading world economies like China, clean technology accounted for over one-third of the nation’s total economic expansion.

The benefits of the global shift into clean energy extend from:

  • Stabilizing the atmosphere and environmental well-being
  • Providing a surge in new job markets
  • Creating specialized employment opportunities
  • Driving industrial innovation

How clean energy benefits the economy, jobs, and new tech

The Green Premium

The green premium refers to the additional cost of growing a renewable, zero-emission technology over one that uses fossil fuels and emits carbon. This measures the price difference between sustainable options (like solar power) and standard options (like oil).

The green premium is often pointed out in arguments that clean energy is the more expensive and financially unsustainable option. However, this argument is countered by compelling 2024 data:

Cost Comparison (2024):

  • Solar photovoltaics: 51% cheaper than the least-cost new fossil-fuel powered plant
  • Onshore wind: 41% cheaper than fossil fuel alternatives

Job Growth and Economic Impact

In the United States, the clean energy workforce has scaled rapidly:

By the end of 2024:

  • Nearly 3.6 million Americans worked in the renewable energy sector
  • 7% of new jobs were created thanks to that sector
  • Clean energy jobs grew 3.5 times faster than the rest of the U.S. economy
    • Clean energy: 2.8% growth
    • General workforce: 0.8% growth

AI and the Renewable Energy Boom

New, developing technologies, especially artificial intelligence, are rapidly driving up global electricity demand. Artificial intelligence requires massive amounts of data in order to compute, and that happens in data centers.

Data center energy consumption:

  • 2024: Close to 415 Terawatt-hours consumed
    • This represents almost 1.5% of global electricity
  • 2030 projection: Power demand expected to grow by 160%

Major tech companies like Google and Meta have committed to “Net Zero” carbon emission goals. Because massive amounts of power are required to run their data centers, these companies are becoming some of the world’s biggest buyers and investors of renewable energy.

While the long-term trajectory of renewable energy is positive, shifting the world’s energy foundation in just a few decades creates significant friction, even though it is, ceteris paribus (all else equal), undeniably beneficial.

Trade-offs and externalities of going green

If clean energy is so beneficial in the long-run, why hasn’t the world made the shift faster? Several factors contribute to the slower-than-ideal transition:

Barriers to faster adoption:

  • High upfront infrastructure costs for solar panels, wind turbines, and grid upgrades
  • Governments worldwide continue to subsidize fossil fuel production
  • Existing energy infrastructure creates path dependency

Supply Chain Concentration

Unlike oil, which is found in many regions, the ingredients for creating the hardware to power clean energy plants are highly concentrated.

China’s dominance in critical materials (as of 2026):

  • 79% of the world’s graphite processing
  • 60% of rare earth elements (terbium and neodymium)
    • Essential for EV motors and wind turbines

Future demand concerns:

  • To meet projected 2030 climate goals, lithium demand is expected to increase by 9x
  • If demand surpasses supply, lithium prices could spike
  • The green premium could be reinstated if supply chain bottlenecks emerge

What this means for us

While the transition to renewable energy involves many trade-offs and high upfront costs, the long-term benefits to the global climate and economy outweigh the initial challenges.

Key takeaways:

  • Stabilized energy prices in the long run
  • Massive job creation across multiple sectors
  • Reduced dependency on fossil fuel price volatility

By focusing on infrastructure investment and adaptable supply chains, the current transition risks can be transformed into a secure green discount for the global economy. This shift will not only benefit the planet, it will also put us on a path to achieving a low-cost energy foundation for our future.

Sources and References