International plans for further development of renewable energy are only likely to be successful if policy provides incentives for investors to move towards less carbon intensive investment, according to chief of research and strategy with Danish pension fund ATP, Ole Beier Sørensen.

The United Nations Intergovernmental Panel on Climate Change (IPCC) yesterday released a special report on renewable energy sources, indicating nearly 80% of the world’s energy supply could be met by renewables by mid-century should the appropriate policy settings be put in place.

The upper end of the scenarios assessed represented a cut of around a third in greenhouse gas emissions from business-as-usual projections.

Sørensen, who is also chair of the Institutional Investors Group on Climate Change (IIGCC), said in a statement that “strong and ambitious” energy development plans, well-designed support schemes and a high carbon price are crucial to boosting investment in renewable energy.

“Another key element is to remove direct as well as indirect fossil fuel subsidies. Such political initiatives will accelerate the development of renewable technologies, create incentives for low carbon investments and really mobilise the private sector,” Sørensen said.

The IIGCC welcomed the European Union Commissioner’s recent comments about the importance of a renewable energy target for 2030, saying a target emphasises the need for focused policy measures which stimulate the private investment that will make emissions reduction goals a reality.

“Clear and ambitious emissions reduction and renewable energy targets enable investors to have confidence in the future direction of climate policy,” Sørensen said.

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