Report: Green Economy Expected to Surpass $7tn in Annual Value by 2030

•Prices of solar PVs fall 90% in 15 years

•IEA says $23bn needed annually to close global power supply gap by 2035

Emmanuel Addeh in Abuja

The global green economy has surpassed $5 trillion and is projected to exceed $7 trillion annually by 2030, creating an abundance of growth opportunities for businesses worldwide, a new report by the World Economic Forum (WEF) has stated.

The report revealed that green revenues are growing twice as fast as conventional revenues on average, while companies involved in green markets often secure cheaper capital and typically enjoy valuation premiums.

With green markets moving at different speeds, mature solutions such as solar, wind, batteries and electric vehicles, it said, are achieving cost competitiveness at the global level. But it stressed that costly technologies such as low-carbon hydrogen and carbon capture, utilisation and storage (CCUS) require substantial support to bend the cost curve.

The report: “Multi-Trillion-Dollar Market: A CEO Guide to Growth in the Green Economy,” developed in collaboration with the Boston Consulting Group, indicated that despite economic uncertainty and diverging environments, investment in green technologies continues to reach record highs.

The report identified the green economy as one of the world’s fastest growing sectors, outpaced only by tech, and highlighted the advantages enjoyed by many companies embracing green solutions.

“Two years ago, in the World Economic Forum’s Winning in Green Markets: Scaling Products for a Net Zero World, we argued that pioneering in green markets is a bet that would pay off and that large-scale green markets would become a reality proving the business case.

“Despite the current headwinds for global climate action, this report shows that the green economy is not a distant opportunity but already a major growth engine of this decade,” said Pim Valdre, Head of Climate and Nature Economy of WEF.

The research showed that companies with green revenues often outperform across multiple financial metrics. On average, green revenues grow two times faster than conventional business lines across the market, while the cost of capital for companies with green revenues is typically lower, it said.

Firms generating more than 50 per cent of their revenues from green markets often enjoy valuation premiums of 12 per cent to 15 per cent on capital markets, it stated, reflecting investor confidence in their long-term resilience and profitability.

“Technological cost declines have accelerated this trend, although solutions are moving at different speeds across markets. Since 2010, the cost of solar photovoltaics and lithium batteries has fallen by around 90 per cent and offshore wind by 50 per cent, making low-carbon solutions increasingly cost competitive.

“ The report estimates that 55 per cent of global emissions reductions needed to decarbonise can now be achieved with solutions that are already cost competitive, with another 20 per cent addressable at minor cost premiums and 5 per cent requiring a behavioural change.

“However, an additional 20 per cent of critical deep decarbonisation technologies currently face major cost disadvantages and will require dedicated policy and industry support to achieve cost competitiveness.

 “These cost declines follow massive investment in clean energy, increasingly led by China. The report finds that in 2024 China invested $659 billion in clean energy and is responsible for over 60 per cent of new global renewable capacity additions through 2030. It leads the world in patents for solar, electrical vehicles and battery technologies, reshaping global supply chains and shifting the centre of green innovation to the East,” the report said.

The report featured 14 case studies from members of the World Economic Forum’s Alliance of CEO Climate Leaders, showcasing how pioneering companies have turned participation in green markets into a competitive advantage.

 “Three things are striking: the resilience of the green economy, with investments in green technologies jumping from record to record against a change in public headlines and sentiments; China’s leadership in manufacturing, innovation and deployment of green technologies; and the opportunity for companies operating in green markets to outperform and earn a premium in capital markets,” said Patrick Herhold, Managing Director and Senior Partner, Boston Consulting Group.

 “With projections to become a $7 trillion market, there will be many more opportunities for companies that act boldly today,” Herhold added.

Meanwhile, the International Energy Agency (IEA) in its World Energy Outlook 2025, has stated that around 2 billion people lack access to clean cooking and some 730 million remain without electricity currently.

It stated that these deficits have far-reaching implications for health, economic opportunity and global development, noting since 2010, 1.5 billion people have gained access to clean cooking and 1 billion to electricity, demonstrating that rapid progress is possible.

 “ Over 60 per cent of households gaining access to clean cooking do so through the use of liquefied petroleum gas and a further 18 per cent with the use of electricity. Bioethanol, biogas and solid biomass each account for around 4-6 per cent of households that gain access, while natural gas plays a limited role in dense urban areas with planned infrastructure.

 “The benefits of this transition by 2040 are immense: it cuts premature deaths due to household air pollution by almost two-thirds, significantly reduces the time spent cooking, and delivers net emissions reductions of 1.25 gigatonnes carbon dioxide equivalent (CO2-eq) annually.

 “The global electricity access gap closes just after 2035. Over 45 per cent of new connections are from grid extensions; 30 per cent from mini-grids, which are a good match for dense, remote communities; and 25 per cent from stand-alone systems, including solar home systems, which are the best option in areas where grid and mini-grid expansion is unlikely to be feasible in the near term.

 “ By 2040, newly connected users add 270 terawatt-hours (TWh) to global electricity demand, contributing up to 45 per cent of the total increase in residential electricity demand in some regions. This is met largely by hydropower, natural gas, and solar photovoltaics (PV), with solar powering most mini-grids and nearly all stand-alone systems.

 “Closing the access gap worldwide requires $4 billion each year for clean cooking from now until 2040, and around $23 billion each year for electricity until 2035. While it is encouraging that private sector involvement is expanding, public and concessional financing remains vital to attract capital to underserved segments, especially in riskier markets where public finances are constrained,” the IEA stated.

In the same vein, it stated that expanding energy access can support productivity improvements in agriculture and local industry, helping to drive broader economic and energy demand growth.