The latest figures, released by the Paris-based agency in an annual report on Wednesday, suggest energy investments were struggling on both counts.

“As things stand, current trends in energy investment show that the world is falling short of climate goals and reliable, affordable energy,” the report said.

Total energy investment is expected to rise 8% this year to $2.4 trillion, above pre-COVID-19 levels. An increase in spending on clean and renewable energy sources accounts for most of the increase, a promising sign for global efforts to cut carbon emissions after years of lackluster growth, the IEA said.

Investments in clean energy have increased by an average of 2% per year in the five years since the Paris climate agreement of 2015. Since 2020, they have increased by 12%, a significant increase but still well below the levels required to meet climate goals, the IEA said.

Clean energy spending will exceed $1.4 trillion in 2022, far behind the roughly $2.8 trillion that would be needed to meet current climate commitments by 2030 and even further behind the more than $4 trillion that will be needed to achieve net zero emissions by 2050.

CL.1 oil,
-4.10%
and gas price NG00,
-2.12%
have skyrocketed since Russia invaded Ukraine. Russia, one of the world’s biggest oil exporters, has seen much of its supplies shunned by Western countries. The sanctions have blocked millions of barrels of oil in the country and forced its oil companies to shut down wells. Meanwhile, geopolitical tensions have led to cuts in Russian gas supplies to Europe.

While the crisis has accelerated spending on clean energy, it has also revived investment in fossil fuels, driven by concerns about energy security. Oil and gas investment rose 10% in 2021 but remains below pre-Covid levels, the IEA said. Investments in coal supply increased by 10% in 2021 and are expected to rise by a similar amount this year, despite global pledges to move away from fuel.

Despite these efforts and growing investment in clean energy, there was no indication that additional energy supplies would be enough to end high energy bills and threatened to push millions of people in Asia and Africa back into energy poverty. said the IEA. .

“A massive increase in investment to accelerate clean energy transitions is the only sustainable solution,” said IEA Executive Director Fatih Birol. “This type of investment is increasing, but we need a much faster increase to ease the pressure on consumers.”

While the IEA predicts that energy investments will increase this year, much of the dollar value of those increases would be due to inflation which makes it more expensive to build new energy projects.

Nearly half of the additional $200 billion that will be invested in energy this year will be eaten up by higher costs. High energy prices have been a key factor in driving up prices for steel, aluminum and cement, the production of which requires large amounts of electricity.

A lack of investment in the metals and minerals required by many clean energy sources poses an additional challenge for the energy transition, the IEA said. Rising input costs threaten to reverse a long-standing trend that green technology prices have been steadily falling in recent years, the agency said.

As prices for electric vehicle batteries have fallen, the metals that make them up, such as lithium, cobalt and nickel, have risen from 5% of total costs less than 10 years ago to more than 20%, said the IEA.

Clean energy investments have been heavily focused on developed countries and China, leaving developing countries behind and threatening a global divide, the IEA said.

China spent $380 billion on clean energy in 2021, while the European Union spent $260 billion and the United States $215 billion. Clean energy spending in emerging and developing economies, excluding China, remains stuck at 2015 levels, the IEA said.

Write to Will Horner at william.horner@wsj.com