According to The Economist, Christiana Figueres, former executive secretary of the UN Framework Convention on Climate Change and architect of the Paris agreement, argues that the global south now drives the clean energy transformation. Despite emissions still rising 0.3% annually and projected warming of 2.6°C, the economic shift is accelerating with renewables growing at record speeds – solar capacity installations in 2024 were 15 times higher than 2015 forecasts. The global south holds 70% of world’s wind and solar potential and 50% of transition minerals, with countries like Pakistan expecting solar to supply 20% of electricity by 2026 and Iran committing $2.3 billion to solar expansion. Africa receives less than 3% of global clean-energy investment despite having 60% of the world’s best solar resources, highlighting both the progress and remaining challenges in the energy transition.
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The Great Economic Realignment
The most significant business story of our generation is unfolding as capital and innovation flow toward the global south’s renewable resources. What Figueres identifies as a “new industrial sunbelt” represents the largest wealth transfer opportunity since the industrial revolution. Companies that recognize this shift early are positioning themselves for decades of growth, while those clinging to outdated energy paradigms risk becoming obsolete. The International Energy Agency projects that clean energy investment will reach $2 trillion annually by 2030, with emerging markets capturing an increasing share.
The $2 Trillion Investment Imperative
The funding gap Figueres highlights – needing to triple investment to $2 trillion annually in emerging economies – represents both a challenge and unprecedented opportunity. Private capital must overcome risk perception barriers in markets where policy frameworks are still developing. However, the returns potential is substantial: solar installations in Nigeria can pay for themselves in six months through diesel displacement, creating compelling business cases that transcend environmental benefits. The World Bank estimates that every dollar invested in renewable energy in developing countries generates $4-7 in economic returns through job creation, energy security, and industrial development.
China’s Strategic Positioning
China’s doubling of solar exports to the global south since 2022 represents a masterclass in geopolitical and economic strategy. While Western nations debate climate policy, China is securing long-term market dominance in the technologies that will power this century. This isn’t just about panel sales – it’s about establishing technical standards, creating dependency relationships, and positioning Chinese companies as essential partners in the global energy transition. The pattern mirrors how the United States shaped global oil markets in the 20th century, but with renewable technology as the new strategic commodity.
The Structural Retreat of Fossil Fuels
Figueres’ observation that 90% of upstream oil investment now maintains existing production rather than expanding supply signals a fundamental market shift. This isn’t a temporary downturn but a structural realignment as capital recognizes renewable energy’s superior economics. The energy transition investment has surpassed fossil fuel spending for the first time, creating a self-reinforcing cycle where scale drives costs down, making renewables increasingly competitive without subsidies.
Strategic Implications for Global Business
Corporate leaders must rethink their emerging market strategies entirely. The traditional approach of waiting for developed markets to lead technological adoption is obsolete. Companies that want to shape the future energy landscape need presence and partnerships in the global south today. The rapid renewable adoption in countries like Oman, Pakistan, and across Africa creates opportunities not just in energy generation but in related industries – green steel, green ammonia, and electrified transportation that leverage cheap, clean electricity.
The Innovation vs. Impact Race
The central question Figueres poses – whether clean energy innovation can outpace climate impacts – defines business risk management for the coming decade. Companies with operations, supply chains, or markets in climate-vulnerable regions face existential threats if the innovation curve doesn’t accelerate. This creates a powerful business case for aggressive climate action beyond corporate social responsibility – it’s becoming a fundamental requirement for operational continuity and market access.
The Leadership Shift Is Permanent
The most profound business implication is Figueres’ declaration that “the era when American politics could make or break global climate co-operation is over.” This means companies can no longer use U.S. political uncertainty as an excuse for delayed climate action. The momentum now comes from economic reality in growth markets, creating a stable foundation for long-term investment decisions regardless of political cycles in traditional power centers.
