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FirstFT: IEA says clean-energy spending must triple to curb climate change

Extreme volatility in energy markets will continue to present a risk unless investment in clean power is tripled in the next decade, the International Energy Agency warned as it issued a call to arms for leaders ahead of the UN climate summit.

Fatih Birol, IEA executive director, told the Financial Times that while projected investment in oil and gas was aligned with the changes needed to reach net zero emissions of greenhouse gases by 2050, public spending on renewable power was only at a third of the future levels required.

“There is a gross mismatch, and the longer this mismatch persists the greater the risk of further sharp price swings and increased volatility in the future,” Birol said.

Annual global energy investment is set to rise to $1.9tn this year, according to the IEA, including about $370bn on new renewable power generation.

The Paris-based IEA said that even if governments’ net zero pledges were implemented, the world would only achieve 20 per cent of the emissions cuts by 2030 needed to keep the goal of net zero emissions by 2050 a possibility.

Thanks for reading FirstFT Europe/Africa. Here is the rest of today’s news — Gary

Five more stories in the news

1. Deutsche Bank faces €500m lawsuit Palladium Hotel Group, one of Spain’s biggest hotel operations, is suing Deutsche Bank for €500m over alleged mis-selling of risky foreign exchange derivatives that it says left it with crippling losses. The claim is the latest in a scandal that has led to the departure of two senior Deutsche bankers and out-of-court settlements.

2. EU launches biggest-ever green bond The €12bn sale attracted more than €135bn of orders and marked the biggest green bond deal, narrowly eclipsing the UK’s £10bn debut last month, as Brussels kicked off efforts to become the world’s foremost issuer of sustainable debt. More on environmental, social and governance news in our Moral Money newsletter — sign up here.

3. UK warns EU against ‘historic misjudgement’ Lord David Frost, UK Brexit minister, said the EU would be making a “historic misjudgement” if it refused to rewrite the Brexit deal covering trading arrangements for Northern Ireland, ahead of Brussels’ publication on Wednesday of a package of measures to ease the bureaucratic impact of the protocol.

Brexit minister Lord David Frost repeated his threat that the UK would unilaterally suspend parts of the Northern Ireland protocol if the EU did not bend further © AP

4. Anger in Welsh steel towns over pensions mis-selling The UK parliament’s spending watchdog is being urged to investigate the handling of a multibillion-pound pension mis-selling scandal that victims claim had “cowboy advisers” who targeted Tata Steel plants, particularly the site at Port Talbot in south Wales, “laughing in their villas”.

5. US bank chiefs: supply chain disruptions ‘transitory’ The widespread turmoil plaguing manufacturers and retailers across the world will probably work itself out over the next few months, chief executives of the biggest US banks told the Institute of International Finance conference.

Coronavirus digest

  • The UK will suffer more longer-lasting economic damage than any other G7 country, the IMF warned, saying its economy would still be 3 per cent smaller in 2024 while most advanced nations return to pre-pandemic growth projections.

  • EasyJet declared the aviation recovery “under way” even as it forecast its second consecutive £1bn annual loss, citing strong passenger demand since the UK relaxed travel rules last month.

  • Medicago, a unit of Mitsubishi Tanabe Pharma that is backed by Philip Morris International, is planning to launch the world’s first plant-based Covid-19 vaccine that is potentially cheaper and easier to transport and store than conventional jabs.

  • A G20 plan to give debt relief to poor countries has fallen far short of expectations, with low-income borrowers deferring less than a quarter of their owed repayments.

Bar chart of Current forecast of output in 2024 compared with the autumn 2019 forecast (%) showing The IMF thinks the UK will suffer the worst total Covid-19 hit among the G7

The day ahead

China trade figures China’s trade growth for September is expected to reveal a deceleration today. My colleague Aime Williams has the takeaways from US trade representative Katherine Tai’s speech on US-China trade policy in our Trade Secrets newsletter — sign up here. (Nikkei Asia, FT)

IEA World Energy Outlook The IEA will release its annual report, which is expected to shed light on the state of energy demand and supply and its effects on climate and the economy. Elsewhere in the sector, Opec will release a monthly oil market report amid soaring US petrol prices. (IEA, FT)

Earnings JPMorgan will provide an outlook on loan demand, which has been soft, and overall consumer spending, which has recovered but could be under threat from the Delta variant. BlackRock and Infosys also report earnings, while Just Eat Takeaway provides a trading update.

Economic data The Office for National Statistics has an estimate of UK gross domestic product for August out, as well as trade and construction output and a monthly index of production and services. (ONS)

Join us for FT Live’s Asia Insurance Summit on October 28 for resilience and growth strategies from our panel of regulators, CEOs and other senior executives.

What else we’re reading and listening to

Xi gambles on tumult to pursue reforms China’s president Xi Jinping could be heading into a storm of his own making as he presses ahead with tough reforms to rein in property prices and reduce income inequality that could do more economic harm than good, as Evergrande teeters on the edge of bankruptcy and manufacturers grapple with power shortages.

Hopes and fears for the global recovery As economies return to some normality, the job of central banks is relatively simple: less generous, better targeted assistance will be the order of the day, writes Martin Wolf, sharing his analysis of the IMF’s latest World Economic Outlook and Global Financial Stability Report.

How Covid may have sparked a medical revolution The success of mRNA vaccines in the fight against coronavirus is opening the way to a new generation of drugs, with personalised cancer treatments among those being developed using a technology once distrusted by Big Pharma.

Diagram showing how cancer vaccines can be engineered to treat individual patients

Listen: ‘My life expectancy was 9 years old’ Many people in their 30s, 40s and even 50s have yet to start saving for retirement and are anxious about how to begin. This week’s Money Clinic guest David was diagnosed with cystic fibrosis and never thought he would reach retirement.

Bart van Ark: ‘Productivity is done by the private sector’ With global supply chains under strain, the head of the UK’s Productivity Institute, who holds one of the most challenging positions in economics, speaks with Chris Giles about how to level up economic performance.

Cycling in London

FT assistant features editor Siona Jenkins recounts her journey from two-wheeled commuter to cycling obsessive in a city where bike lanes are frequently taken over by ubiquitous Mamils — “middle-aged men in Lycra” — and shares the best routes and groups for women.

A woman riding at speed past London’s Saint James Park
For millions around the world, cycling has been a silver lining of the pandemic — an excuse to escape the home and take much-needed exercise © Getty Images

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