NATURE-BASED ECONOMICS AND RENEWABLE ENERGY INVESTMENTS: INVESTOR RISK AND BENEFIT ASSESSMENT

Abstract

The transition to renewable energy is recognised as a catalyst for achieving carbon neutrality by 2050. Such a transition requires significant investments in renewable energy projects, as well as investments in research and development in this area. Increased sector financing can be achieved through effective government policies that reduce the risks of attracting private capital. The article aims to study the main trends in renewable energy investment and identify key risks and benefits in renewable energy markets. The methodology is based on a mixed design, including general scientific methods of analysing and synthesising scientific publications and analysing global investment indicators by type of renewable energy, country, region, and technology. Results. After 2020, there will be a significant increase in investment in the renewable energy sector, which is twice as high as the financing of fossil energy sources. In 2024, investments in the clean energy sector were dominated by investments in renewable energy, energy efficiency, and grid and storage development. This trend is due to the decline in prices for solar power plants and the rise in prices for traditional energy resources. Regionally, there is a significant imbalance in investment flows, with the highest volumes recorded in China, the US, and the EU. In the EU, investments in offshore wind sources prevail, which is explained by the lower weighted average cost of capital for investments after tax. In addition, government incentive policies promote the development of the renewable energy market. In particular, in Germany, the support policy provides for a reduction in fixed tariffs to reduce the costs of technology producers to reduce them. France has introduced preferential tariffs for wind energy. The practical value of the study lies in a detailed analysis of investment trends in the renewable energy sector in different regions and countries.