Green Energy Transition May Drain The Global Economy In 2024

By Shubhendra Anand , 09 July, 2024

Green Energy Transition - 

The world economy is expected to experience a downward economy due to ongoing transformation in the energy sector. The economy and environment are closely linked since changes in one industry affect the other. Clean energy transition tends to follow primary materials whose production cost is higher than the current methods. Therefore, researchers expect the global economic system will experience slow progress to achieve green economy status in 2024.

According to recent surveys in 2024, the economic condition of a country is the main factor behind the progressing clean energy transition. Low-cost energy supports the economy of a nation. However, it has proven to be a hurdle in the green energy transition. An economic downturn is expected if the financial conditions of a country are not well balanced. This is due to the higher production cost of the energy required for clean energy transition. Even if green energy indicates renewables are abundant in nature, it requires much production to yield and transport it to the consumers. 

However, much renewable energy is needed to build a new green energy sector. Therefore, a nation's economic condition is crucial in transforming clean energy. The International Monetary Fund (IMF) suggests that 2024 is expected to experience slightly low economic growth globally. It accounts for up to 2.9 percent in 2024, which is 3 percent less compared to economic development in 2023. The developing nations contributed the most to the economic growth in 2023, and the energy market condition is somewhat the same for 2024. Another factor that can accelerate the clean energy transition is electric vehicles. However, consumers' affinity towards electric vehicles is decreasing. High prices and other technical issues with electric cars have led to downward momentum in electric vehicle sales.

Renewables like solar and wind take up most of the funds for green energy transition, leaving no room for other greener energy sources in 2024. Electricity is the primary energy source that needs to be compensated for with renewable sources, like wind and solar. Therefore, the industrial sector may suffer from a lack of nuclear energy production in the upcoming years. The United States and European Union suffered economic losses in 2024 as green energy production led to higher. China is among the developing nations accelerating the production of electric vehicles faster. 

owever, the manufacturing sector is experiencing a new hike in China. Experts believe this may create a problem as China diverts from its construction sector. as manufacturing increases in China, it can lead to the supply of goods at low prices. If China's sales growth in the manufacturing sector grows with low prices, then the rest of the world must compete at much lower prices. Thus, it will affect the global manufacturing sector. The low growth rate in the manufacturing sector globally will lead to layoffs in the production and manufacturing sectors. Therefore, the green energy transition may sound effective for the environment, but technically, it can drown out the economic condition globally.