The green transition will be stronger than inflation


In the long term, the demand for renewable sources will not decrease due to production costs

The costs of renewable energy production are increasing considerably. Inflation associated with the transition to a green economy - better known as "greenflation" - is a controversial topic of discussion, as it could have a significant impact on the balance sheets of governments and businesses. In recent months, the increase in demand for clean energy has plumped the boom in requests for raw materials, which have experienced a surge in costs since the use of traditional extraction methods has now been limited: the prices of Metals, such as tin, aluminum, copper, nickel and cobalt, all essential for energy transition technologies, have increased between 20% and 91% this year. A trend that could discourage the use of clean energy.

However, although the ecological transition is increasingly expensive, at least in the short term, there is no need to fear for the economic sustainability of the sector. This was stated by the Reuters Global Markets Forum. In fact, when solar panels or other necessary components of the renewable energy chain are mass-produced, production costs are reduced, generating what are called "economies of scale", facilitating the reduction of costs related to taxation, labor and advertising, allowing the sector to grow even more. "The overall costs for the green industry will tend to decline," said Harry Boyd Carpenter, the chief executive officer for green economy and climate action at the European Bank for Reconstruction and Development.

The forecasts are therefore positive: Allied Market Research expects that the global renewable energy market, now valued at over 1.2 trillion US dollars, will double in 2030, reaching almost 2 trillion dollars. Gauri Singh, Deputy Director General of the International Renewable Energy Agency, said that despite inflation and supply chain disruptions, lower financing costs contributed to the record generation of 260 gigawatts of energy from renewable sources last year. "The renewable energy market is softening - said Singh - From now on it will no longer be so easy to earn from those products that are considered harmful to the environment."

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