Assessing Decarbonization Approaches across Major Economies

Abstract

The global energy transition is an uneven process, fundamentally related to the level of economic development of countries and their access to energy resources (renewable and non-renewable) to a large extent. The global climate is interconnected, and all nations impact it through their products and services. The six countries discussed—China, Brazil, Germany, Japan, Russia, and India—account for 44.8% of global primary energy consumption and 49% of global CO₂ emissions. Each of them has its own strategy for achieving carbon neutrality, based on different decarbonization scenarios, which, according to the authors, depend on geopolitical factors, national economy characteristics, and the established pragmatic goals and objectives. However, the “green agenda” itself may not always be among the top priorities when formulating energy strategies. The study objective is to analyze the feasibility of the stated goals in these countries using a combined logistic curve-based forecasting tool for predicting solar and wind production as well as investment volumes. It aims to justify the relation between solar and wind energy production and investment policies using a calculated technological coefficient. Results show similar, but time-shifted fluctuating investment dynamics in solar and wind energy trends in Japan, Germany and China, with Germany and Japan outperforming investment forecasts when considering the technology efficiency coefficient. Furthermore, the findings highlight the overwhelming appreciation of the unevenness of the green transition process, which will consequently make it impossible to meet the goals of the Paris Agreement until 2050. Taking these factors into consideration, exploratory decarbonization scenarios for these six major world economies alongside two dimensions, namely, the pace of green transition versus green technology and versus resources, are presented.

1. Introduction

Uneven development is a characteristic feature of evolutionary processes. In socio-economic systems, this is primarily evident in varying levels of prosperity, where some countries not only possess significant wealth but also have abundant resources for further development. Since benefits result from the purposeful actions of myriad economic agents, these activities require specific resources, particularly human and energy resources. Over the past 200 years, economic activity has been closely intertwined with the utilization of the most prevalent and accessible hydrocarbon resources, such as coal, oil, and gas. With the advent of electricity, their utilization multiplied, and the rapid growth in global industries in the 20th century led to the establishment of an energy-intensive economic model. The availability of energy resources, especially oil and gas, became a crucial condition for ensuring sustainable economic growth. However, the emergence of climate change acted as a catalyst for many countries around the world to reassess their energy policies. Governments are increasingly using industrial policies to combat climate change, but the tension between economic growth and emission reduction or international goals over national security may hinder the effectiveness of their approach, highlighting the complex nature of the problem [1].

Consequently, the early 21st century witnessed the formulation of various plans to achieve carbon neutrality, which have been adopted at both the national and supranational levels by political and economic unions.

The European Union (EU) stands as the largest and most consistent proponent of economic decarbonization, accounting for 10% of global primary energy consumption and 7% of total global emissions. Recently, the EU adopted the Green Deal, a comprehensive plan outlining its ambitions for a greener transition. This includes climate targets to achieve zero emissions by 2050 [2] (p. 8). The European Commission alone approved aid schemes totaling EUR 51 billion in 2022 to promote the deployment of new capacities for renewable energy production and industrial decarbonization [2]. Similar green transformation plans have also been implemented in the USA, Japan, India, Great Britain, Canada, and other countries, which propose various investment plans to develop and support environmentally friendly technologies. In the region of Central Asia, despite the countries’ potential for renewable energy production, no significant changes towards a sustainable energy transition could be traced [3]. Research on the western Balkan countries comparing with OECD countries found contrasting results. This underscores the necessity of tailored policies for each region and highlights the importance of region-specific approaches to green growth [4,5]. A study on the USA and Germany investigating the effects of CO₂ emissions, economic growth, technological innovations, and renewable energy recommends “policy ramification” that boosts investment in technological innovation, promotes low-carbon production, and redirects economic growth towards renewable energy [6] (p. 1). A study by Yang et al. [7] investigates the impact and mechanism of renewable energy development on energy security, equity, and environmental sustainability in China and gives policy recommendations on how to focus on the synergetic development of energy security, equity and sustainability by relying more on renewable energy sources, mainly hydropower. A study by Abdallah et al. [8] (p. 26) discusses the different policy approach of the “West Asian Petro-monarchies,” especially Qatar, which rely heavily on fossil fuel exports, and argues that these countries will also be obliged to change their strategy and pave the way for decarbonization and invest more in renewable energy production. Ma et al. [9] and Solarin et al. [10] analyze the role of only the BRICS countries (Brazil, Russia, India, China and South Africa) [11] in the optimal low-carbon transition path for sustainable development, and the impact of technological innovation on energy production, highlighting the increasing electricity demand in these countries and supporting the development of strategies and scenarios that should be followed by these countries. In their study, Hunt et al. [12] found that developed and developing countries need to follow different strategies due to their non-renewable energy potential, their investment capacities and their electricity needs.

The present research focuses on six countries and economies from all around the globe, namely, four of the BRICS founding countries—Brazil, China, Russia, and India— and two worldwide leaders of technological developments and innovations, Japan and Germany, based on the following reasons.

First of all, the six countries that we are considering also have their own ambitions in terms of developing and supporting green technologies, which will presented and discussed in detail in Section 4. Moreover, four out of the six countries are the founders of the BRICS countries (Brazil, Russia, India and China), while Germany and Japan are considered leaders in technology and innovation.

Secondly, we must consider that these six countries account for 30.2% of world GDP and are home to 44% of the global population, and together they are responsible for 44.8% of global primary energy consumption and 49% of global CO₂ emissions. It is obvious that if the energy transition were carried out in full scale in these six countries, then the world would be significantly closer to solving the global climate agenda. In this regard, the actual policies of these six countries in the field of energy transition deserve careful study. Unlike developed countries that have made significant investments in environmentally friendly technologies, developing economies such as China, India, and Russia prioritize pragmatic goals for their own economic development over absolute carbon neutrality. This reality must be taken into account.

The present paper highlights some recent developments in the area of energy transition and policies through investigating the energy generation processes in the abovementioned six countries. Furthermore, the analysis relates the solar and wind energy production to investment policies, looking at the national characteristics and country regulations.

This study aims to address the imbalances in the global energy transition by analyzing the feasibility of decarbonization targets in six major countries. It will investigate the disparities in energy transition strategies in these countries, which vary widely according to economic development, resource availability, and geopolitical interests. Using numerical research methods and scenario analysis, the study seeks to understand why these countries are at different levels of ambition and progress in renewable energy (mainly solar and wind) deployment. It seeks to determine whether the rapid pace of development can be sustained despite the growing importance of renewable energy, particularly solar and wind, and whether investment patterns are consistent with decarbonization goals.

This work is intended as a perspective paper contributing to the holistic view on the unevenness of the process of the energy transition worldwide, and not a paper presenting an extensive methodological approach to evaluate this complex problem.

The study first introduces the research questions, and the research methodology used, then discusses the trends and successes in the decarbonization of economies over the past 20 years. In Section 4 and Section 5, detailed analyses on the solar and wind energy production forecasts as well as investment forecasts are discussed for the selected countries, namely, Brazil, China, Germany, Japan, Russia and India. The interrelationship between solar and energy production and investment is justified by the technology coefficient. Finally, conclusions are drawn and country policies are placed in technology–resources dimensions.

2. Research Questions and Methodology

Many countries around the world have announced the adoption of national strategies to achieve carbon neutrality. The objective of the present research was to analyze the possibility of achieving the stated goals in six large economies of the world: Brazil, China, India, Germany, Japan and Russia. After the abandonment of Russian energy sources, the current situation in Germany shows that changes in the geopolitical situation are one of the important factors that can affect the speed of the energy transition. Advances in technology, particularly in solar and wind energy, have been a key factor in the growth of the global share of renewable energy over the past 15 years. But will the same high dynamics in the development of these two types of energy generation continue in the next 30–35 years? This research question is to be answered using the examples of the countries under consideration. The final focus of the present research was how geopolitical, technological and investment factors might combine to influence the stated goals of the six countries’ energy strategies.

The present research has identified a gap in the current available literature in the construction of an exploratory scenario of the strategies followed by a given set of very important nations regarding the accomplishment of the goals set by the Paris Agreement, namely, to reach a zero emissions environment in the short time span until 2050. With this purpose, some correlation methods and forecasting tools based upon historical data on energy production and investment in these countries in the last 25 years have been applied.

In addition, the issue of the unevenness of the process as a consequence of the inequality among nations has not been widely discussed in the literature. See, for instance, that only now has IRENA (International Renewables Energy Agency, Masdar, UAE) [13] raised the theme for the discussion’s arena, claiming that the process “needs to be equitable”, and JPMorgan (JP Morgan Chase & Co., New York, NY, USA) [14] warns of a need for a “reality check”.

This study considers the possible energy transition scenarios of a set of countries that account for a large part of the world’s energy consumption and CO₂ emission. The conducted research applies the critical realist and the interpretive approach presenting an in-depth historical analysis of the specific countries energy transition policy, and at the same time, it gives qualitative and quantitative investigations. Although based on a small number of countries, the chosen set of six nations together play a determining role in energy production and consumption. The research has a pragmatic aspect as well, since it incorporates and considers country strategies and policies and aims at value-driven research.

2.1. Numerical Research Methods

Regarding the methodology, this research applies correlation analysis as well as quantitative forecasting methods, for example, time series and trend analysis using logistic curve forecasting. MS Excel and MS Power BI have been used for calculations. In Section 3, forecasting is used for the six selected countries applying the Holt–Whitman exponential smoothing algorithm for seasonal data (ETS-AAA), as yearly seasonality was traced in the time series. The ETS-AAA includes a term for additive trend, additive error, and additive seasonality [15]. A forecast is made for 10 years with a 10-year seasonality, and a 95% confidence interval is determined for each country.

Empirical evidence shows that the fastest-growing segments in the global renewable energy sector at the beginning of the 21st century were solar and wind power. Numerical forecasting methods are based on logistic functions. The purpose of using the logistic function is to estimate the potential volume of investment and growth in generating capacity under the assumption that in the future, the same high rates of development of solar and wind generation will remain as was the case in the period 2004–2019. The nature of the logistic function is such that in the initial period, the growth rate is not high. As investment accumulates and technology improves, as is often the case in economic systems, growth rates become increasingly higher. This period of rapid growth also has its limits: saturation occurs, and growth rates fall, and the logistic curve approaches a certain asymptote.

In a paper by Akaev et al. [16], a logistic function was proposed for forecasting the growth of solar and wind energy capacities:

$$E_{WS}\left(t\right)=E_{ws1}+{\displaystyle \frac{E_{ws2}}{1+r_{ES}\ast \mathrm{e}\mathrm{x}\mathrm{p}\left[{-\vartheta }_{ES}\right(t-T_0\left)\right]}}$$

(1)

$$E_{WW}\left(t\right)=E_{ww1}+{\displaystyle \frac{E_{ww2}}{1+r_{EW}\ast \mathrm{e}\mathrm{x}\mathrm{p}\left[{-\vartheta }_{EW}\right(t-T_0\left)\right]}}$$

(2)

where $E_{WS}\left(t\right)$ and $E_{WW}\left(t\right)$ are the forecast growth in solar and wind energy capacity, respectively, and $E_{ws1}$ and $E_{ww1}$ are initially installed solar and wind energy capacities. The other parameters, namely, $r_{ES}$ and $r_{EW}$ are the relative growth potential of installed capacities at time $T_0$, respectively, for solar and wind energy; ${\vartheta }_{ES}\mathrm{and}{\vartheta }_{EW}$ are average growth rates of installed capacities, respectively, of solar and wind energy, and $E_{ws2}$ and $E_{ww2}$ are the growth in installed capacities, respectively, of solar and wind energy for each country over the entire period of time $t.$ All these parameters are constants to be determined.

As a novelty in the research method, investment data for the period 2004–2019 were used for the wind plus solar energy; therefore, a new function is necessary to be constructed, that is, the sum of two logistic functions above.

The condition for the coincidence of the logistic sum for solar and wind energy capacities with the investment integral I(t) is as proposed by the authors:

$$a1+{\displaystyle \frac{b1}{1+c1\ast \mathrm{e}\mathrm{x}\mathrm{p}[-d1(t-{T1}_0\left)\right]}}+a2+{\displaystyle \frac{b2}{1+c2\ast \mathrm{e}\mathrm{x}\mathrm{p}[-d2(t-{T2}_0\left)\right]}}=C\underset{t-t0}{\overset{t}{\int }}I\left(t\right)dt$$

(3)

where $a1$ corresponds to $E_{ws1}$, $a2$ corresponds to $E_{ww1}$, $b1$ corresponds to $E_{ws2}$, $b2$ corresponds to $E_{ww2}$, $c1$ corresponds to $r_{ES}$, $c2$ corresponds to $r_{EW}$, $d1$ corresponds to ${\vartheta }_{ES}$, and $d2$ corresponds to ${\vartheta }_{EW}$.

Table 1. Coefficient values for the logistic function (3) in the case of the selected countries.

Parameter	Brazil		Japan		Germany		China		India
	Solar	Wind	Solar	Wind	Solar	Wind	Solar	Wind	Solar	Wind
$a1$	0.0001		0.01		0.001		0.001		0.45
$a2$		0.02		1.3		6		0.0001		2
$b1$	146		180		490		2203		750
$b2$		93		48		124		1703		420
$c1$	530		23		30		86		60
$c2$		66		13		15		66		13
$T_0$	2010	2011	2010	2023	2012	2002	2010	2011	2018	2018
$d1$	0.39		0.25		0.15		0.25		0.3
$d2$		0.29		0.18		0.14		0.29		0.19

shows the numerical values of the parameters for the selected countries, found by the least squares method.

The constant C is determined from data from 2005 to 2019 on the proportionality of accumulated investments and built capacities. The need to determine this constant is due to the fact that there is both an accumulation of capacity and investments that ensured this increase. Figure 1 shows the ratio between accumulated investments and total capacities of solar and wind energy in logarithmic scale for four countries (Brazil, Germany, China and Japan). As can be seen, the ratio between accumulated capacity and investments made is close to constant.

Then, to determine I(t), when differentiating both sides of equality (3) with respect to time, we obtain:

$${\displaystyle \frac{d}{dt}}\left[a1+{\displaystyle \frac{b1}{1+c1\ast \mathrm{e}\mathrm{x}\mathrm{p}[-d1(t-{T1}_0\left)\right]}}+a2+{\displaystyle \frac{b2}{1+c2\ast \mathrm{e}\mathrm{x}\mathrm{p}[-d2(t-{T2}_0\left)\right]}}\right]=C\left[I\left(t\right)-I(t-t0)\right]$$

(4)

This implies the equation for finding I(t) for t > t0:

$$I\left(t\right)={\displaystyle \frac{1}{C}}{\displaystyle \frac{d}{dt}}\left[a1+{\displaystyle \frac{b1}{1+c1\ast \exp \left[-d1\left(t-{T1}_0\right)\right]}}+a2+{\displaystyle \frac{b2}{1+c2\ast \exp \left[-d2\left(t-{T2}_0\right)\right]}}\right]+I(t-t0)$$

(5)

After finding I(t), we check by calculating for t > t0:

$$L\left(t\right)=C\underset{t-t0}{\overset{t}{\int }}I\left(t\right)dt$$

(6)

and comparing L(t) with the sum of two logistic functions on the left side of Equation (3).

To illustrate the methodology, the simulation of the model data is shown in Figure 2.

The simulation is run for five countries, namely, China, Japan, Germany, India and Brazil, leaving out the Russian Federation, due to lack of sufficient data. The quantitative analysis focuses on sole electricity generation from renewable energy sources and does not consider other energy production, such as, for example, battery production, which might mean a limitation to the research but also gives an opportunity for further future research.

Table 2. Selected variables, periods and source databases used for research analysis.

Variables	Periods	Databases
Investments in solar and wind energy	2004–2019	[17,18,19,20,21,22,23,24]
Total capacities of solar and wind energy	2004–2022	[25]
GDP	2000–2020	[26,27]
Energy intensity of GDP	2000–2020	[28]
Electricity generation from renewable energy sources, including hydropower, solar, wind, nuclear, and others (biomass, thermal, etc.)	2000–2023	[25]
EV sales share, cars (%)	2015–2022	[29,30,31,32]
The ratio of the capacity (sun + wind) to the integral of investment for each country.	2005–2019	Authors’ calculations

lists the variables, periods and databases used for the analysis. The selected variables/indicators are not fully exhaustive, but cover a wide range of the most relevant variables without which energy systems cannot operate, for example, the installed capacities.

Assessment-based country analysis using data on solar and wind electricity production as well as scenario planning are also utilized to explore the barriers and challenges faced and to reveal underlying causes of the experienced energy policies and reveal the hiddenly implied anomalies and contradictions.

2.2. Research Questions

Three questions are key to our study. The first relates to the assessment of the possibility of implementing low-carbon economic development scenarios in practice on a country level. Despite the attractiveness of such an idea, it is obvious that its practical implementation is associated with the need to solve many technological, economic, and even institutional issues. And here the second question of the study arises about the set of conditions that can provide such a low-carbon development scenario. The third question relates to the sphere of energy policy and what should prevail in it: practicality and a realistic assessment of the existing conditions, or the goal of achieving carbon neutrality at any cost. Since countries, like people, are not alike, it is hardly possible to have uniform scenarios for all of them. Therefore, moving from the particular to the general, considering the characteristics of national economies and critical generalization of existing practices are the basis of the research methodology used by the authors.

3. Trends and Successes in the Decarbonization of Economies over the Past 20 Years

Since decarbonization scenarios and strategies are largely determined by initial conditions, the latest data on the primary energy balance of the chosen six countries and CO₂ emissions are presented in

Table 3. Primary energy consumption, 2021 (Source: [20]).

№	Country	Total (TWh)	By Source, %
			Oil	Gas	Coal	Hydro	Nuclear	Wind	Solar
1	Brazil	3490	35.46	11.59	5.67	27.20	1.06	5.42	-
2	China	43,791	19.41	8.65	54.66	7.77	2.34	3.92	-
3	Germany	3512	33.10	25.78	16.74	-	4.93	8.77	4.62
4	Japan	4928	37.27	21.03	27.04	4.12	3.12	2.29	4.58
5	Russia	8694	21.43	54.59	10.90	6.46	6.42	0.08	0.07
6	India	9.584	26.8	6.48	55.92	4.38	1.15	1.86	1.86
	World	165,320	36.30	26.60	29.70	2.90	1.90	1.00	0.50

Note: 1 Mtoe = 11.63 TWh.

and

Table 4. CO₂ emissions, 2020 (10³ mt) (Source: [20]).

№	Country	Total	By Source
			Coal		Gas		Oil
		mt	mt	%	mt	%	mt	%
1	Brazil	467,383	55,445	11.9	60,330	12.9	305,511	65.4
2	China	10,667,887	7,421,100	69.6	605,253	5.7	1,611,761	15.1
3	Germany	644,310	199,077	30.9	170,732	26.5	250,681	38.9
4	Japan	1,030,775	402,978	39.1	216,543	21.0	377,381	36.6
5	Russia	1,577,136	356,945	22.6	747,590	47.4	388,774	24.6
6	India	2,670,000	1,770,000	66.3	133,190	5.0	621.930	23.3
	World	34,807,259	13,976,098	40.2	7,399,509	21.3	11,072,500	31.8

mt: metric tons.

below.

Examining the data on primary energy consumption for 2021, it is immediately noticeable that even high-tech countries like Japan and Germany still heavily rely on hydrocarbon sources, accounting for 85.34% and 75.62% of their energy balance (Table 3), respectively. China and Russia have similar figures of 82.72% and 86.92%, respectively. In the case of China and India, more than 54% of primary energy consumption is attributed to coal, while in Russia, it is natural gas. Brazil has the lowest proportion of coal, oil, and gas in its energy balance, standing at 52.7%, largely due to the significant contribution of hydropower, which accounts for 27.2% of primary energy consumption. Consequently, such primary energy balances result in significant CO₂ emissions, with the largest emissions resulting from the Chinese economy, representing almost one-third of the world’s total (Table 4).

To gain a better understanding of the energy consumption and energy intensity in these countries, let us refer to Figure 3, which illustrates the GDP dynamics (in USD, at 2015 prices) and the energy intensity of the economy (MJ/GDP). The figure shows that despite significant improvements in energy efficiency over the past 20 years, China and Russia still lag behind other countries, with their specific energy intensity of GDP being 6.29 and 8.12 (MJ/GDP), respectively, far higher than the other countries in 2019.

Another noteworthy trend regarding the energy intensity of GDP in Brazil, Japan, and Germany is the gradual slowdown in the reduction rate. It is evident that achieving each new level of energy intensity reduction becomes increasingly challenging, and these countries are approaching a saturation point where this indicator seems to stabilize, at least with the technologies that currently dominate the energy landscape.

Figure 4 presents the dynamics of electricity generation from renewable energy sources, including hydropower, solar, wind, nuclear, and others (biomass, thermal, etc.), in these countries between 2000 and 2023. The figures show the energy generation in TWh from hydro and nuclear resources between 2000 and 2022 on the left axis, while the energy generation in TWh from solar, wind and other energy resources in the same period is presented on the right axis.

Brazil’s electricity generation is characterized by a significant share of hydropower and extensive use of bioethanol, both of which are natural resources that the country strives to utilize to the fullest (Figure 4a). During the period under review, China’s electricity industry made significant progress in all areas of renewable energy sources, with hydropower accounting for the largest share. Solar, wind, and nuclear energy have also experienced substantial development (Figure 4b). In Germany, there has been a significant increase in wind energy capacity, coupled with the near-complete phasing out of nuclear power plants by the end of April 2023 (Figure 4c). This political decision leaves the country without nuclear energy as a renewable energy source. As observed in Figure 4d, Japan has significantly reduced its reliance on nuclear power plants. However, the growth in wind energy capacity has been lower compared to solar energy. In recent years, Japan has initiated a phased return to service of decommissioned nuclear reactors, but this process is not yet complete.

On the other hand, Russia, with its abundant hydrocarbon reserves, has made limited advancements in solar and wind energy on an industrial scale, despite the fact that the increase shows exponential growth from the year 2013 (Figure 4e). Geographical factors partially account for this trend. Hydropower and nuclear power continue to be the primary renewable energy sources in Russia.

In India, solar energy use shows an exponential trend between 2000 and 2020 while the utilization of wind for electricity production has continuously been increasing (Figure 4f). The size of the energy generation from solar and wind energy is far larger than the corresponding figure in Russia, which uses solar and wind energy source on the smallest scale compared to the other forms of energy source.

The graphs depicted in Figure 4 provide insights into the development of renewable energy in these six countries, focusing on the commissioning of solar and wind energy capacities. Solar and wind energy are regarded as the most promising pathways for renewable energy development in many countries.

Analyzing the share of renewables in electricity generation in these countries, let us refer to Figure 5. As mentioned in the Methodology, the shares in the case of the selected countries are forecast using ETS-AAA for a 10-year period, displaying the 95% confidence intervals as well (gay area).

Figure 6 displays the forecast trends in these countries between 2022 and 2032.

First and foremost, it can be noted that these countries can be divided into three groups. China and Germany have a notable increasing trend of electricity generation from renewable sources. China has a relatively stable growth trend and is forecast to increase in the next 10 years to around 44% (Figure 5b). The country is motivated to increase the present share, and the narrowness of the 95% prediction interval suggests an expectedly stable increase in the future. Germany’s past data fluctuated, which could be explained by the financial crisis in 2008 and 2009 and the country’s decision on the closure of nuclear power stations (Figure 5c). However, it seeks alternative energy sources and the share of renewables in electricity generation is forecast to increase in the next 10 years to around 58%.

Brazil and India rather show a stagnating share of electricity generation from solar and wind energy; however, the reasons are different. Brazil is in a peculiar situation, since the share of renewables in electricity generation is already around 90%, and thus increasing this share is probably not feasible and requires disproportionately large investments (Figure 5a). Therefore, Brazil is not motivated to increase the present share. Consequently, a 90% share can be expected in the long run in Brazil. It might fluctuate around this percentage; however, to reach a higher percentage is quite an optimistic forecast. In India, despite a notable continuously increasing trend, due to the high fluctuations in the share of renewables in electricity generation not being predicted to increase, a rather stagnating share around 37% can be expected between 2023 and 2032 (Figure 5f). In India, there was a period with lower share of renewables in electricity generation; however, an upward trend from around 2015 is observed. In general, the forecast depicts a share stabilizing around 23% for India in the next 10 years.

The third group is Russia and Japan. Russia is continuously increasing the usage of renewables in electricity generation, but very slowly, and for the next 10 years, a null increase is forecast (36.75% is forecast, the same share as in 2022) (Figure 5e). Japan, on the other hand, has also been in a peculiar position since the Fukushima disaster in 2011 (Figure 5d). Since then, a dynamic uprising can be seen, which allows us to expect to reach a stable 30% share of renewables in electricity generation, while the exponential smoothing algorithm indicates that there will be a peak of around 41% in 2030 and then a possible downturn.

Another important systemic characteristic related to the pace of the energy transition is the rate of market saturation with new products using renewable energy sources, such as electric vehicles. Considering that the relatively rapid growth of this segment of the automotive market has occurred in the last 7–10 years, its dynamics are of particular interest.

Table 5. EV sales share, cars (%), 2015–2022 (source: [29]).

Country	2015	2016	2017	2018	2019	2020	2021	2022
China	1.0	1.5	2.4	4.9	5.0	5.8	10.0	29.0
Germany	0.7	0.7	1.6	1.9	2.9	13.0	26.0	31.0
Japan	0.6	0.6	1.2	1.1	0.9	0.8	1.2	3.0
Brazil	0.0	0.0	0.0	0.0	0.1	0.2	0.7	1.0
Russia	-	-	-	-	-	-	-	-
India	-	-	-	0.5	0.7	1,8	4.8	6.3
World	0.7	0.9	1.4	2.3	2.6	4.2	8.7	14.0

below exhibits the unfolding of electric car sales in the selected six countries and in the world. The numbers include all electric types, such as full electric vehicles, fuel cells, or hybrid plug-in type electric vehicles.

Indeed, the growth rate in the share of electric vehicles in total sales has increased significantly in China and Germany, and its growth over the period under review is clearly exponential. This cannot be said about the Japanese and Brazilian markets, and Russia has not even reached 1% of electric vehicle sales. At the same time, the global share of electric vehicle sales was 14% in 2022, which is significantly higher than that of a country such as Japan. This was largely due to smaller developed countries, which, thanks to government support policies, quickly increased sales of electric vehicles. Among such countries, first of all, Norway should be noted with its 80%, Iceland with 41%, Sweden with 32%, and the Netherlands with 24%, although the European Union as a whole showed a more modest result of 12%, and even more modest figures appear for the USA (6%) [32]. In total, in 2022, there were 25.9 million electric vehicles in use worldwide [30], out of a total fleet of 1.446 billion [31], implying then that the total share of running electric vehicles is still about 0.02%, still very far from the mammoth-like total fleet. In China, this figure is higher, but does not exceed 0.5%. Thus, despite high market growth rates in individual countries, the global trend of market saturation with electric vehicles still remains low. It must be recognized that these slow rates of saturation hide different energy strategies and scenarios of the different countries for energy transition.

Collectively, these figures allow for an assessment of the actual rates of hydrocarbon substitution with renewable energy sources. They serve as benchmarks for future scenarios regarding the development of “green” energy and the energy transition itself.

4. Analysis of the Green Transition in the Selected Countries

As evident, the energy policies of the six countries have exhibited significant differences over the past 20 years. Geopolitical changes that have unfolded since February 2022 are notably impacting the state of energy markets, consequently influencing future development scenarios. Let us delve into the specific circumstances of each country to explore the key obstacles and drivers shaping their path towards carbon-free development.

4.1. Brazil

4.1.1. Brazil’s Status Quo

National energy approaches are heavily influenced by initial conditions, with geography, economics, and demographics being key factors. In this regard, Brazil presents a unique amalgamation of such conditions. With an area exceeding 8.5 million square kilometers, a population of 211 million people, a coastline stretching around 7500 kilometers, and an annual GDP of USD 3.44 trillion (at current 2021 PPP prices), the country necessitates significant energy resources. Between 2000 and 2021, primary energy consumption increased by one and a half times (from 8.26 to 12.57 EJ), with the largest shares in 2021 coming from oil (35%) and hydropower (27%). Hydropower also accounted for 55% of the country’s electricity generation, while renewable energy sources like solar, wind, and others contributed 22% [25]. The discovery of substantial offshore pre-salt oil reserves (approximately 50 billion barrels) in 2007 acted as a deterrent to the development of renewable energy (excluding hydropower). However, the high costs associated with extracting these resources (estimated at USD 1 trillion) compelled authorities to reconsider the idea of renewable energy development in the country [33]. Currently, proven oil reserves are estimated at 13.0 billion barrels, and Brazil aims to increase daily oil production from 3 million barrels to 5 million barrels by 2030, potentially positioning itself as one of the world’s largest oil exporters [34].

Brazil’s energy consumption exhibits several noteworthy features, including:

• Relatively low per capita energy consumption, particularly when compared to developed countries. In 2021, it amounted to 58.7 GJ, which is 2–3 times lower than in Germany and Japan (152 GJ and 141 GJ, respectively);
• A significant share of hydropower in the energy mix, although its production fluctuated between 370 and 430 TWh over the last decade. Consequently, its share in electricity generation declined from 78% in 2010 to 55% in 2021;
• The prominence of bioenergy, which has experienced a steady growth in its share of total energy supply. Currently, it accounts for 31.7% of primary energy consumption. Notably, about 75% of bioenergy is derived from solid biomass, primarily sugarcane waste [35];
• Brazil ranks among the world’s largest sugar producers, and the technological processes associated with sugarcane production also yield ethanol and electricity. This contributes approximately 52.8 million tons of oil equivalent (toe) to the country’s primary energy balance [36];
• In terms of per capita production of liquid biofuels, Brazil is a global leader. In 2019, bioethanol accounted for 46% of the combined use of gasoline and ethanol, predominantly through in-house production at three plants with a total capacity of 184 million liters of ethanol per year [35].

4.1.2. Brazil’s Approach

In 2020, Brazil adopted the National Energy Plan [37], which serves as a framework for public energy policy planning. It encompasses 64 long-term scenarios that analyze production, consumption, and key development directions. The wide array of scenarios results in considerable variation in final indicators, for instance, the total installed solar capacity by 2050 ranges from 27 to 90 GW, with a corresponding range of its share in total installed capacity and electricity generation at 5–16% and 4–12%, respectively. Similarly, the share of all renewable resources (excluding hydropower) in the final energy mix ranges from 44% to 70%. These scenarios also yield significant fluctuations in electricity consumption in 2050, spanning from 870 TWh to 2100 TWh [37]. The growth projections until 2030 are more precise, with an average annual growth rate of 6.9% expected for solar, wind, and other renewable energy types (excluding hydropower and biomass). This will result in their combined share reaching 23%, slightly below the 26% share of hydropower [38]. The implementation of such plans aims to elevate the share of renewable energy sources to 45% in Brazil’s primary energy balance by 2030 [39].

Overall, Brazil’s energy policy can be characterized as pragmatic, with elements of conservatism. The country seeks to maximize the utilization of its own energy resources, irrespective of whether they are inherently renewable or non-renewable. For instance, capitalizing on its vast sugarcane resource base (covering an area of approximately 10 million hectares with a total processed raw material mass of nearly 600 million tons) is economically advantageous. The focus on leveraging this resource base facilitates an anticipated 1.28-fold increase in the country’s primary energy consumption by 2030 compared to 2021 [38]. Furthermore, considering Brazil’s position in the middle average of the global per capita GDP rankings, the energy approach does not prioritize saturating the vehicle fleet with EVs. Instead, it announces intentions to produce batteries for the EV segment, capitalizing on the country’s well-developed technological base and natural resources.

4.2. China

4.2.1. China’s Status Quo

China’s economic achievements are widely recognized. With the highest GDP growth rates for over a quarter of a century, the country has emerged as a global leader in economic and technological development, approaching the size of the American economy. Within the next 10–15 years, China has the potential to become the world’s largest economy. This prospect of becoming an economic leader plays a significant role in shaping the country’s energy strategy for the next 20–30 years.

First and foremost, it is crucial to note that China, with a population of 1.4 billion people, does not possess significant oil and gas reserves. As of 2020, proven oil reserves were estimated at 26 billion barrels, and gas reserves at 8 trillion cubic meters. However, the country does have substantial coal reserves, accounting for approximately 13% of global reserves, with a total of 143 billion tons [25]. The presence of extensive coal reserves has historically contributed to its dominance in China’s primary energy balance during the period of rapid economic growth, ranging from 70% to 77% between 1990 and 2010. However, by 2020, the share of coal had decreased to 56% [40]. The country’s rapid economic growth has been accompanied by a significant surge in energy demand. From 2000 to 2021, China’s primary energy consumption has increased by 3.73 times, rising from 42.28 EJ to 157.65 EJ, representing approximately 25% of global energy consumption in 2021 [25]. This substantial increase in energy consumption is also attributed to energy-intensive industries such as steel, aluminum, and construction, which have contributed 48% to 38% of China’s GDP from 1980 to 2020 [41]. In terms of hydrocarbon resource consumption, China consumed 696 million tons of oil (with 500 million tons imported), 304 billion cubic meters of gas (with 135 billion cubic meters imported), and 3.9 billion tons of coal in 2019 [42]. Notably, over the past two decades, the replacement of coal in the energy mix has been driven by increased shares of oil (20%), gas (8%), hydropower (9%), wind power (3%), and a rapid expansion in nuclear power capacity (2%) in 2020 [40].

4.2.2. China’s Policy

As China is responsible for nearly a third of global CO₂ emissions, various scenarios have been proposed to reduce emissions by 2050. According to the baseline scenario [43], the following economic and energy parameters are projected by 2050:

• Average annual economic growth rate will be 5% until 2035, decreasing to 3.5% thereafter in 2050;
• Per capita GDP is expected to reach USD 31,400 in 2050;
• The country’s primary energy balance will peak by 2035 at 3.91 billion toe and stabilize at 3.8 billion toe in 2050;
• Energy intensity of the economy (energy consumption per unit of GDP) will decrease by 54.8% in 2035 and 74% in 2050 compared to 2015 levels;
• In 2050, hydrocarbon sources will account for 65% of the primary energy balance (coal—33%, oil—15%, gas—17%), while renewable energy sources will contribute 35% (hydropower—8%, nuclear—7%, other renewables—20%);
• Final energy consumption in 2050 will consist of 47% electricity and other energy resources, and 53% hydrocarbon sources;
• Non-fossil fuel will generate 55% of all electricity in 2050;
• The absolute volume of oil use in 2050 will decrease to 570 million tons (with 200 million tons produced domestically), while natural gas consumption will increase to 700 billion cubic meters (with 350 billion cubic meters produced domestically);
• Carbon emission intensity will drop by 62% and 82% from the level of 2010 by 2035 and 2050, respectively.

Although these figures cover a long-term horizon, they appear achievable, assuming the country maintains a stable development trajectory. One energy development scenario entails a complete ban on internal combustion engine cars by 2040 [43], which could result in a significant reduction in gasoline and diesel fuel consumption, approximately 4–5 times lower than the baseline scenario. However, the feasibility of such a development in China’s transportation sector appears unlikely.

To understand the main drivers that could facilitate the realization of the aforementioned energy development scenario, it is necessary to examine China’s achievements in non-hydrocarbon energy utilization over the past 20 years. Referring to the data in

Table 6. China energy transition capacity: non-fossil fuel sector.

Source	2011	2021	Growth Rate per Annum, %
Generation (TWh)
Nuclear	87.2	407.5	16.7
Hydro	688.0	1300.0	6.0
Solar	2.6	327.0	62.1
Wind	74.1	655.6	24.2
Geothermal, Biomass and Other	27.6	169.9	19.9
Renewables Total	104.3	1152.5	27.2
Installed Capacity (MW)
Solar	3108	306,403	58.3
Wind	46,355	328,973	21.6

Data source: [25].

, it is crucial to highlight the rapid development rates of two renewable energy sources, namely, wind and solar. From 2011 to 2021, their average annual generation growth rates were 24.2% and 62.1%, respectively. Similarly, the average annual growth rates of installed capacity were 21.6% for wind and 58.3% for solar. Noteworthy growth rates in energy generation were also observed in the geothermal and biomass sectors, at 19.9%. Additionally, China has witnessed significant developments in hydropower (6%) and nuclear energy (16.7%). Over the course of a decade from 2011 to 2021, hydropower production nearly doubled (from 688 TWh to 1300 TWh), while nuclear energy production increased almost fivefold (from 87.2 TWh to 407.5 TWh).

Such a high rate of development of all types of renewable energy in the Chinese economy indicates the country’s exceptional technological potential. China has emerged as the global leader in two crucial sectors of wind and solar energy equipment manufacturing (currently controlling approximately 80 percent of the world’s solar cell production, and 10 out of 15 wind turbine manufacturers worldwide are Chinese ones), including the main components for land and offshore wind turbines, as well as the majority of components used in crystalline silicon modules. Furthermore, China dominates the entire value chain of lithium-ion batteries, accounting for 80 percent of global cell and battery capacity [44]. This remarkable technological potential has propelled the Chinese market to become the fastest-growing clean energy technology market, providing additional opportunities for the country to disseminate technical innovations. Notably, China has constructed the world’s longest and most powerful ultrahigh-voltage (UHV) transmission lines, connecting renewable energy sources in the northwestern regions to the energy-intensive east coast. China’s position in these technological niches is also supported by its significant natural reserves of essential materials widely used in renewable energy, as for instance, according to Benchmark Mineral Intelligence [45], China produced 51 percent of the world’s chemical lithium, 62 percent of the world’s chemical cobalt, and 100 percent of the world’s battery-grade graphite in 2018.

Despite possessing significant technological capabilities and abundant natural resources for renewable energy materials, China has chosen not to pursue a complete transition to “green” energy even within a 20- to 30-year timeframe. This approach can be characterized as pragmatic and realistic, which provides grounds to believe that China will successfully achieve its goals of decarbonizing the economy.

4.3. Germany

The German economy, the largest in the EU, is currently undergoing a profound structural reorganization of energy flows, driven by multiple factors beyond climate considerations.

4.3.1. Germany’s Status Quo

In 2010, Germany adopted an energy concept aimed at achieving 35 percent of electricity consumption from renewable sources by 2020. In practice, these targets were surpassed with 38 percent in 2018 and 44 percent in the first half of 2019. The German government has further planned to increase the share of renewables in electricity generation to 50 percent by 2030, 65 percent by 2040, and 80 percent by 2050 [46]. These ambitious plans were made alongside the decision to completely phase out nuclear power by 2022. Germany used to rely on nuclear energy for a quarter of its electricity, but all 33 reactors have now been decommissioned, with the remaining three reactors set to close in April 2023 [47]. Lignite, a type of coal, also plays a significant role in power generation, accounting for a quarter of the country’s total production. While the government initially planned to phase out coal by 2038, there is increasing pressure to achieve this goal by 2030 [48]. Such a move would entail retiring generation sources with an installed capacity of approximately 75 GW, equivalent to Germany’s total installed capacity of wind and solar energy in 2013 after 15 years of active development in this sector [25].

Another noteworthy aspect of Germany’s energy sector development is the growing share of natural gas in the country’s energy mix, with consumption increasing from 60.3 billion cubic meters in 1990 to 90.5 billion cubic meters in 2021, nearly 1.5 times [25]. As of 2021, Russia was the largest supplier of natural gas to the EU (40 percent) and Germany (approximately 60 percent) [46,49].

The cooperation in gas supplies between the USSR and later Russia has a long-standing history, with mutual political and economic benefits. However, concerns about energy dependence and the need to diversify energy supplies have arisen, particularly since the events of 2022 involving Ukraine. Consequently, Europe has witnessed a significant reduction in reliance on Russian energy sources. Germany now faces the challenge of not only replacing retiring capacities based on coal and nuclear power but also transitioning away from all Russian energy carriers, primarily oil and natural gas.

The rejection of Russian gas has led to a sharp rise in prices and a decrease in import volumes. Absolute monthly price volatility of TTF gas futures has increased from about EUR 5–10/MWh in the period 2017–2020 to peaks exceeding EUR 150/MWh in 2022 [50]. This has resulted in a peak of 12–14 percent in consumer prices in the eurozone [51]. There is a potential risk of a recession in OECD countries in 2023 and a slowdown in GDP growth in the euro area from 3.3 percent in 2022 to 0.5 percent in 2023 [52]. To address these challenges, the German government has implemented a EUR 200 billion economic package, including subsidies to reduce gas and electricity prices (EUR 83 billion) and assistance programs aimed at reducing gasoline taxes, introducing a unified ticket for public transport, and temporarily freezing CO₂ emission prices for transportation and buildings (EUR 95 billion) [53]. Despite these measures, inflation remains high, with an average annual level of 7.9 percent in 2022 and to 5.9 percent in 2023 [54].

Since the 2000s, such a “privilege” of the German economy in obtaining certain competitive advantages in the international market has been seen as a kind of erosion of European integration. The fact is that Germany has some of the lowest wholesale electricity prices in Europe and one of the highest retail prices thanks to its energy policy. Taxes and surcharges account for more than half of the domestic electricity price [47]. All these combined has created a situation where Germany’s authority over the legal framework for bilateral gas relations with Russia has increasingly been challenged by Brussels and other EU member states [55]. The possibility of delivering Russian energy resources to Europe, mainly gas and oil, at a level of about one-third of their needs by 2030 has been seen by some, particularly American experts, as a potential leverage point. As a result, recommendations have been made to diversify energy carriers [56].

4.3.2. Germany’s Energy Concept

Earlier, we noted that Germany was quite comfortable buying Russian gas on the basis of long-term contracts and at lower prices. According to a number of German experts, such purchases, averaging USD 20 billion a year, were one of the key factors in creating a successful export-oriented model of the German economy and the welfare state, with a GDP exceeding USD 2 trillion. As these times are over, in 2023 the German industry paid about 40% more for energy than in 2021 [57]. To address these challenges, Germany has introduced amendments to its energy policy, primarily through new laws aimed at accelerating the development of renewable energy sources by 2030. The goal is to achieve an 80 percent share of renewable energy in electricity generation by 2030 [58]. The proposed measures include increasing onshore wind power capacity by 10 GW per year, reaching 115 GW by 2030; doubling solar energy capacity to 215 GW by 2030, with an annual growth of 22 GW, and reaching 30 GW of offshore wind power by 2030, 40 GW by 2035, and 70 GW by 2045 [59]. Additionally, Germany is considering a four-country agreement with the Netherlands, Belgium, and Denmark to develop offshore wind power in the North Sea, entailing investments of EUR 135 billion to achieve a combined generating capacity of 65 GW by 2030 and 150 GW by 2050 [59]. According to BloombergNEF, Germany needs to create approximately 250 gigawatts of new electrical capacity, with an estimated cost of USD 1 trillion, to ensure the country’s future energy security by 2030 [60].

However, as some experts note [61], the feasibility of these ambitious plans is complicated by a number of circumstances, among which the following should be noted:

• The speed and scale of transformations require not only accelerating the construction of power plants utilizing renewable energy sources but also significantly expanding the power grid infrastructure, particularly from north to south. Moreover, increasing the capacity of renewable energy sources in the industrialized southern regions and the solar and wind generation sectors would need to be achieved in less than 8 years, a pace faster than what Germany accomplished over the past two decades.
• High electricity and gas costs could delay the much-needed transformation processes, particularly in heavy industry, and potentially lead to deindustrialization, affecting employment and socio-economic stability [62].
• In the coming years, Germany will need to not only build LNG infrastructure on the coast but also expand and adapt its gas transmission network to enable reverse gas flows, shifting from the traditional east–west direction to west–east and potentially south–east.
• The construction of new infrastructure, such as LNG terminals, will only be meaningful if they are built as “h2-ready”, meaning they can quickly transition to the use and transportation of hydrogen, which is feasible only if a hydrogen market is established.

In addition to the aforementioned circumstances, two systemic factors can further complicate the achievement of the intended goals. Firstly, the Jevons paradox should be considered, which can fully manifest in renewable energy systems. These systems are highly complex and require significant support for their operation. Paradoxically, ensuring the functioning of these complex energy systems often leads to increased, not less, fuel consumption [63]. Secondly, the geopolitical situation in the world poses another challenge. During the period of unifying the western and eastern states, the German federal government could focus on addressing the energy transition issue and mobilize substantial resources over two decades, as there was less turbulence and uncertainty compared to the present world [64]. This external factor has the potential to significantly impact the implementation of Germany’s decarbonization program.

Consequently, it can be concluded that Germany’s approach to energy development is not pragmatic, but due to the economic and political circumstances, mainly in Europe and Asia, it needs to be realistic. Meanwhile, since Germany possesses the required technology, its energy development program can also be considered ambitious, which would allow Germany to achieve faster green transition growth, which may be slightly hindered by eventual scarcity of material resources.

4.4. Japan

4.4.1. Japan’s Status Quo

By the early 1990s, as the real estate asset bubble burst and the stock market crashed, the sun of the “Japanese economic miracle” had set. The ensuing painful search for a new model of economic development dragged on for a decade, characterized by Japanese economists as “lost”. The main reasons for this long-term stagnation are described in detail in the literature [65,66,67]. According to banking experts, despite the best efforts of the authorities, the consequences of the “lost decade” continue to be reflected in the entire Japanese economy today [68]. This macroeconomic background influences the Japanese government’s plans for decarbonizing the economy.

In terms of energy approach, Japan has undergone changes influenced by various unforeseen circumstances, such as the oil crisis of the 1970s, the prolonged recession of the 1990s, and the Fukushima nuclear power plant accident [69]. The oil crisis in the 1970s initiated an energy-saving program to reduce oil imports and promote the use of alternative energy sources. Oil consumption in the primary energy balance decreased from 244.1 million tons in 1975 to 151.7 million tons in 2021, with its share declining to 37.3%. The average annual rate of decline in oil consumption from 2011 to 2021 was 2.8% [25].

4.4.2. Japan’s Approach

In 2002, the Energy Policy Act was passed, mandating the development of medium-term (5-year) energy plans. The Fifth Energy Plan was adopted in 2018, focusing on energy security, economic efficiency, environmental protection, and safety. In October 2021, the Sixth Energy Plan was adopted, aiming for renewables to account for 50% to 60% of electricity demand by 2050. Carbon capture and storage (CCUS), nuclear and thermal power plants are expected to provide the remaining share, with 10% coming from hydrogen and ammonia production [70]. Unlike Germany, Japan has not abandoned nuclear energy despite the Fukushima nuclear power plant accident. Currently, there are 33 operating reactors, 27 are out of service, 16 are in the process of being restarted, and 2 reactors are under construction [71]. It is projected that nuclear energy will account for 20–22% of the electricity generation mix by 2030.

Japan set a goal in 2014 to achieve a renewable energy share of 22–24% in electricity generation by 2030, including solar, wind, bioenergy, hydropower, and geothermal sources [70]. However, European experts argue that these plans are insufficient and may not fully address the decarbonization challenge. They highlight low development rates of solar energy compared to EU countries, with Japan aiming for only 6 GW of capacity per year by 2030, primarily from solar panels on rooftops rather than large-scale solar farms [72]. The development of solar and wind energy in Japan faces challenges such as high costs, public resistance, integration difficulties, intermittent electricity generation, and the need for additional investments [69].

A notable aspect of Japan’s energy policy is its focus on hydrogen. Japan has set a target of creating 1 GW of hydrogen-based power by 2030, with the potential to increase it to 15–30 GW in the future. The hydrogen approach also includes establishing commercial hydrogen supply chains to secure 300,000 tons of hydrogen by 2030, aiming for a cost of JPY 17 (USD 0.16) per kilowatt-hour of hydrogen-generated electricity [70,73]. Prime Minister F. Kishida’s plan to invest JPY 150 trillion (USD 1.1 trillion) over the next decade to reduce greenhouse gas emissions by 46% by 2030 has raised questions regarding its ambition and feasibility [74].

Paradoxically, Japan’s energy policy also emphasizes the diversification of energy sources, particularly hydrocarbons, which explains the significant investments in domestic and international projects for oil, gas, and coal development, surpassing investments in renewable energy sources. Japan is the second-largest lender, after China, providing USD 5.2 billion in annual government financing to the coal industry abroad [75]. LNG supplies are relatively diversified, with over one-third coming from Australia, and the remainder from countries such as Malaysia, Qatar, Russia, Brunei, and the United States. On the other hand, oil supplies are less diversified, with nearly 90% coming from the Middle East. Fossil fuel usage, although declining, is projected to account for 76% of primary energy consumption and over 50% of electricity generation in Japan’s energy balance until 2030 [70].

Considering these factors, it can be concluded that Japan’s energy development scenario for the next 20–30 years is pragmatic, even with plans to invest USD 1 trillion in green energy. Pragmatism is likely influenced by lessons learned from the “lost decade” and the challenges Japan currently faces, including an aging population, a shortage of human resources, the need to attract migrants, and the potential erosion of Japanese self-identity.

4.5. Russia

4.5.1. Russia’s Agenda

In the early 2000s, a study was conducted as part of Russia’s climate agenda, identifying a 60-point package of measures that could lead to significant GDP growth by 2030 without a substantial increase in energy consumption and greenhouse gas emissions [76]. According to this study, by 2030, the country could reduce energy consumption by 23% (to 1020 Mtoe) and emissions by 19% (to 2425 Mt CO₂), with an estimated cost of about USD 150 billion [77]. However, the volume of greenhouse gas emissions in 2020, as reported in the National Report of the Russian Federation on the Inventory of Anthropogenic Emissions, was 2051 million tons of CO₂, which is significantly lower than the target set by the study [78]. The “Strategy for the social and economic development of the Russian Federation with low greenhouse gas emissions until 2050”, approved by the government in 2021, projects net emissions of approximately 1670–1700 million tons of CO₂ by 2030 [79]. This strategy, presented at the UN climate conference in Glasgow in November 2021 (COP26), did not raise significant concerns regarding Russia’s forests and swamps’ ability to double CO₂ uptake, although Russia did not adopt the COP26 recommendation to limit methane emissions (i.e., natural gas production) and phase out coal in the foreseeable future, along with India, China, and the United States [80]. It is worth noting that some Russian experts believe that these long-term goals may be challenging to achieve after 24 February 2022 due to imposed sanctions, which limit traditional Russian exports and opportunities to enter emerging low-carbon markets [81].

4.5.2. Russia’s Status Quo

The development of solar and wind power in Russia lags behind that of China, the United States, and Europe. As of 1 March 2023, the total installed capacity of renewable energy generation facilities in Russia reached 5.81 GW, with approximately 4 GW resulting from the state support program for renewable energy [82]. Despite the slow growth rates, a target of at least a 12.5% share of renewable energy in total electricity generation by 2050 is proposed [82]. However, achieving such goals is ambitious, considering that in 2022, solar and wind generation in Russia accounted for about 7 billion kWh, while in China it reached 982 billion kWh and in the USA 484 billion kWh. Per capita production of solar and wind energy in Russia was significantly lower at 48.6 kWh/person, compared to the leading countries such as Denmark and Sweden with around 3000 kWh/person [83]. With its vast territory and remote settlements, Russia has the potential to develop alternative energy sources to provide sustainable power supply, particularly in regions beyond the Urals and the far north. However, the abundance and accessibility of resources, from biomass to oil, coal, and gas, create economic barriers to the development of solar and wind energy.

Russia inherited advanced nuclear energy technologies from the USSR, and it has maintained and developed this competitive advantage. The country is now a global leader in fast reactor technology and has increased its exports of nuclear goods and services, with over 20 nuclear power reactors planned for export and USD 133 billion in foreign orders in 2017 [84]. Nuclear energy plays a significant role in Russia’s renewable energy sources, with 37 operational reactors, 3 under construction, and 10 decommissioned. In 2019, nuclear power generation accounted for 209 TWh of electricity, approximately 19% of the total generation. Hydroelectric power plants generate a similar amount of electricity, and together these two renewable sources contribute to 37% of Russia’s total electricity generation. If Russia maintains its current electricity production structure and increases the share of solar and wind energy to 12.5% by 2050, it can reach the milestone of 50% renewable energy sources in electricity generation, aligning with major economies worldwide.

In summary, it can be concluded that Russia follows a pragmatic as well as realistic approach to its energy development process, as it is aware of its abundant resources and its competitive advantage in nuclear energy technologies. However, due to less developed technologies (e.g., the sales of EV do not reach yet a noticeable proportion (Table 5)) and the heavy reliance on non-renewable and nuclear energy resources, the country’s green transition growth pace based on solar and wind energy production lags behind that expected.

4.6. India

4.6.1. India’s Scenario

Possible growth scenarios for the Indian energy sector are outlined in the 2023 updated version of the government report [85]. The government of India has established an ambitious program for creating new capacity, especially in solar and wind energy, over a time horizon up to 2029–2030. As of March 2023, the total installed electricity generation capacity was 415.4 GW, of which 236.68 GW came from thermal power plants (coal, including lignite and gas), 6.78 GW from nuclear power, and 171.8 GW for all types of renewable energy (hydropower, solar, wind, small and pumped storage plants, bioenergy) [85] (p. 13). According to the latest government document, India plans to increase its total generating capacity to 777,144 MW by 2030, setting the desired solar and wind power capacity at 392,461 MW, i.e., the increase compared to 2022 should be 287,352 MW. [85] (p. 23). This desired option, if implemented, will allow the share of renewable energy sources in installed capacity to reach 60%. However, as the authors of the document admit, the plan provides for the commissioning of only 117,000 MW, and the remaining 180,000 MW does not yet have financial support [85] (p. 26).

Another review [24] estimates investment volumes for two scenarios of India’s energy transition on the horizon until 2050. The first scenario, “economic transition (ETS)”, is estimated at USD 7.6 trillion, the second scenario, “zero emissions (NZS)”, USD 12.7 trillion [24] (p. 50). Under the ETS, investment in energy supply and demand reaches USD 7.6 trillion over 2022–2050, an annual average of USD 262 billion. To stay on track for net zero, according to BNEF’s NZS, investment levels are 1.7 times higher, for an annual average of USD 438 billion (equal to about 5% of expected gross domestic product) and a total of USD 12.7 trillion to 2050. Total investment in fossil-fuel power drops from USD 317 billion in the ETS to USD 142 billion in the NZS. To abate emissions from the remaining use of fossil fuels in the NZS, India needs USD 870 billion in investment for CCS (carbon capture and storage). EV sales account for the largest share of investment for energy demand in both scenarios: in the NZS, USD 3.9 trillion is spent deploying EVs [86].

4.6.2. India’s Status Quo

If we look at the data on the commissioning of solar and wind energy capacity in India over the past 18 years (Figure 4), we should note high growth rates, especially in the last 10 years. Unfortunately, there are no reliable statistics on the volume of investments that ensured such rapid growth. However, there are data on investments made in these energy sectors in the last three years: 2019/2020—USD 8.36 billion; 2020/2021—USD 6.39 billion; 2021/2022—USD 14.40 billion [23]. Over the same years, the increase in capacity amounted to 5236 MW, 11,807 MW and 15,700 MW, respectively. It is easy to determine that to commission 1 MW of capacity, USD 1.6 million, USD 0.54 million, and USD 0.92 million on average were spent. If we assume that investment costs per 1 MW of capacity will be in the range of USD 0.54–0.92 million, then the total investment volume to achieve the desired capacity parameters will be from USD 155 billion to 263 billion. This means that India should invest an average of USD 19.4 billion to USD 32.9 billion per year over the coming years, which is significantly higher than the USD 14.4 billion figure in 2021/2022.

In summary, India’s approach to green transition is ambitious and is less realistic in terms of investments and financial support. The country has a twofold goal, and it can be said that India is following an idealistic approach to achieve its goals backed by the raise in share of EV sales and the solar and wind capacities installed in the country. The solar and wind capacity investment can be hindered only by a lack of funds.

5. Assumptions about Possible Investment Volumes for Selected Countries

First and foremost, it is worth noting that China exhibits the highest rates of development and the largest investment volumes in the energy sector [17] (see Figure 7). Figure 7 presents the size of investments in solar and wind energy production in the selected countries (USD billion) in the period 2000–2022. In the figure, China is presented on the right axis, due to the much higher investment volume and in order to better illustrate the similar trend shift in time. This dynamic has enabled the country to rapidly increase its capacity to 200,000 MW for each energy type within a relatively short timeframe. Moreover, the volume of investments has been substantial, peaking at approximately USD 130 billion in 2014.

The second-highest installed capacity (110,000 MW) is seen in Germany’s energy sector, with investment peaks reaching around USD 43 billion around 2006, while in Japan and China, high investments were carried out five to ten years later [18]. Also importantly, investment by Brazil and India shows an almost constant and balanced behavior. German investment peaked in 2006, Japanese in 2010, and Chinese about 2013, that is, not necessarily in phase. More importantly, the volume of investment showed a sharp decline in the last decade, amounting to USD 5–7 billion, which seems to be recovering timidly in recent years. Japan has primarily focused on expanding its solar energy capacity (65,000 MW), but after reaching a peak investment value of USD 45 billion, there has been a downward trend, nearing USD 15 billion in 2019 [17]. Brazil, after a peak of investments in 2007 of about USD 42 billion, has shown a much less accentuated level of investment in this sector, now stabilized at around USD 6 billion [19]. Despite this, the contribution of wind energy to its energy mix has grown substantially, now exceeding 15,000 MW [17,18,19,25] (pp. 12,14,20,24).

We have already justified the use of logistic curves when comparing the size of investments and the production of solar and wind electricity, presenting the condition for the coincidence of the logistic sum of solar and wind energy capacities with the investment integral I(t), described in Equation (3). Constant C is determined based on data for 2005–2019 in selected countries on the proportionality of accumulated investments and built capacities, and the nature of its change is shown in Figure 1.

Table 7. Empirical data and modeling results: installed capacity (GW) and accumulated investments of wind and solar energy for 2010, 2019 and 2040.

Year	Brazil		China		India		Germany		Japan
	GW	USD Billion	GW	USD Billion	GW	USD Billion	GW	USD Billion	GW	USD Billion
Empirical Data
2010	1.3	45.4	44.4	149.2	10.5	34.3	38.8	154.4	9.2	73.2
2019	27.1	106.4	437.3	956.6	49.8	119.4	79.6	319.0	52.4	327.3
Simulation Results
2040	237.0	584.3	3781.3	3925.0	1046.	507.8	460.0	957.9	208.9	1061.3

summarizes the results of the simulation using logistic curves.

As can be seen from Table 7, the estimated volumes of investment needed to ensure high growth rates in solar and wind energy are significant. By 2040, they should increase in Brazil by 5.5 times, in China by almost 4 times, in India by more than 4 times, in Germany by 3 times and in Japan by 3.2 times compared with the accumulated investments in these countries in 2019. In total, these five countries must invest just over USD 7 trillion for 20 years. Such volumes of investment are extremely unlikely, especially given that further improvements in the efficiency of technologies and materials for solar and wind generation are becoming increasingly expensive.

Table 8. Comparative analysis of the results of simulation (2020–2040) and empirical data (2004–2019).

Country	For 2004–2019		Average per Year 2004–2019		For 2020–2040		Average per Year 2020–2040
	GW	USD Billion	GW	USD Billion	GW	USD Billion	GW	USD Billion
Brazil	27.1	106.4	1.9	7.1	208.6	476.1	9.9	22.7
China	437.3	956.6	29.1	63.7	3217.0	2962.2	153.2	141.0
India	49.8	119.4	3.3	7.9	979.2	383.0	46.6	18.2
Germany	79.6	319.0	5.3	21.2	349.0	614.1	16.6	29.2
Japan	52.4	327.3	3.5	21.8	143.2	716.6	6.8	34.1

compares the results of the simulation for the period 2020–2024 with the empirical data for 2004–2019 for electricity generation (GW) from solar and wind source and the average investments.

Figure 8, Figure 9, Figure 10, Figure 11 and Figure 12 show the assumed trajectories of capacity growth and accumulated investments that ensured this growth. These curves are obtained based on logistic equations, which are detailed in Section 2, Research Methodology. Each figure consists of two curves: the top curve shows projected capacity growth; the lower curve shows the dynamics of investment. It is to be noted that the forecasting dynamics of investment are subject to fluctuations, as was the case in the empirical data of these countries. Therefore, due to uneven capital inflows, different countries have different dynamics of capacity growth. For example, in the case of Japan in the years 2030–2035, the investment volumes are subject to fluctuations, similarly to the period of 2045–2050. Accordingly, in these years, there will be a slower rate of capacity growth.

The total capacity for Japan should rise to 208.87 GW (see Figure 8), and the accumulated investments by 2040 should amount to USD 1061.26 billion according to the forecast. Considering that by 2020, the volume of investments already amounted to USD 327.3 billion, over 20 years (2020–2040), the total investment is expected to amount to USD 716.56 billion. On average, Japan must invest USD 34.1 billion annually. For comparison, in the period 2004–2019, an average of about USD 21.8 billion (63.93% of the forecast) was invested per year.

If we look at the forecasts for 2040, the total capacity for China should be 3781.31 GW by 2040 (see Figure 9), and the accumulated investment by this period needs to rise to USD 3925.04 billion. Considering that by 2020, the volume of investments already amounted to USD 956.6 billion, over 20 years (2020–2040) the total investment should amount to USD 2962.24 billion. On average, China needs to invest USD 141 billion annually. For comparison, in the period 2004–2019, an average of about USD 63.7 billion (45.18% of the forecast) was invested per year.

Looking at the forecasts for 2040 for Germany (see Figure 10), the total capacity should be 459.48 GW, and the accumulated investment by this period should amount to USD 957.95 billion. Considering that by 2020, the volume of investments already amounted to USD 319 billion, over 20 years (2020–2040), the total investment should amount to USD 614.15 billion. On average, Germany should invest USD 29.2 billion annually between 2020 and 2040. For comparison, in the period 2004–2019, an average of about USD 21.2 billion (72.6% of the forecast) was invested per year.

In the case of Brazil (see Figure 11), looking at the forecasts for 2040, the total capacity should be 237.03 GW, and the accumulated investment by this period should amount to USD 584.29 billion. Considering that by 2020, the volume of investments already amounted to USD 106.4 billion, over 20 years (2020–2040), the total investment should amount to USD 476.1 billion. On average, Brazil needs to invest USD 22.7 billion annually. For comparison, in the period 2004–2019, an average of about USD 7.1 billion (31.28% of the forecast) was invested per year.

Finally, in the case of India (see Figure 12), the forecast for 2040 says that the total capacity for India should rise to 1046.18 GW, and the accumulated investment by this period needs to amount to USD 507.77 billion. Considering that by 2020, the volume of investments already amounted to USD 119.4 billion, over 20 years (2020–2040), the total investment should amount to USD 382.97 billion. On average, India should invest USD 18.2 billion annually. For comparison, in the period 2004–2019, an average of about USD 7.9 billion (43.4% of the forecast) was invested per year.

The lowest speed of increase can be expected on Germany, which is in harmony with its fluctuating behavior in the usage of renewables in electricity generation and the several changes in energy policy in the country. Due to these facts, Germany is expected to reach saturation point at a relatively slow pace. Japan and China seem to behave similarly; however, higher investments are needed to reach saturation point in Japan, which can be explained again by the Fukushima disaster. A higher influx of capital could boost the solar and wind energy industry. Brazil, as explained earlier, has a high share of renewables, which leads to its saturation point in a very short time despite the lower volume of capital influx.

Looking ahead, it can be said that on the horizon until 2060, the trajectories forecast require much more investment than was invested in the five countries during the years of the highest rates of development of these two energy technologies, which is in line with the findings of Solarin et al. [10] stating that a higher influx of capital is necessary to develop renewable-energy enhance technologies. Similarly the IRENA report [13] highlights the disparity in the countries’ capacities and opportunities. It also recommends increasing capital investments and strengthening international collaboration.

Furthermore, calculations have been made on how technology efficiency can affect the volume of investment. The ratio of the logarithm of capacity (solar + wind) to the integral of investment for each country was calculated for each country. Figure 13 displays the results.

All curves reach an asymptote approximately equal to 2, starting from approximately 3.6, i.e., the ratio is 1.8. This can be interpreted as an increase in technology efficiency by 1.8 times, similarly to the dramatic drop in solar and wind LCOE (levelized cost of energy), which highlights the significant progress in technology efficiency reported by IRENA [87]. “Since 2010, solar PV has experienced the most rapid cost reductions, with the global weighted average LCOE of newly commissioned utility-scale solar PV projects declining by 89% between 2010 and 2022” [87] (p. 35). It would not have been possible without more efficient solar panels and larger-scale production (economies of scale brought down manufacturing costs significantly). The technology efficiency parameter aligns with LCOE as solar panel efficiency increases, and the capacity for generating electricity grows with each unit of investment. This captures the essence of the LCOE decline, i.e., obtaining more energy output for the same initial investment. Therefore, both measures point to the same factor: technological advancements that improve efficiency drive down the cost of generating energy [87].

Assuming that in the period from 2020 to 2040, the energy efficiency of technologies will increase at the same rate (which will be overoptimism), then the volume of investments will be reduced by 1.8 times, i.e., this amount for Japan will be USD 398 billion (USD 716.56 billion/1.8), or about USD 20 billion on average per year. This figure is smaller than the USD 21.8 billion for the period 2004–2019. Following these assumptions, we can adjust the volume of investments that will be required for other countries. For China, this will amount to USD 1645.7 billion (USD 2962.24 billion/1.8), in the case of India, it is USD 212.8 billion (USD 382.97 billion/1.8), in the case of Brazil it is USD 264.5 billion (USD 476.09 billion/1.8), and for Germany, it is equal to USD 341.2 billion (USD 614.15 billion/1.8). Average annual investment volumes, considering the correction, will be the following: China—USD 78.4 billion, India—USD 10.1 billion, Brazil—USD 12.6 billion and Germany—USD 16.2 billion. If we compare the period of 2020–2040 with the period of 2004–2019, then for Germany and Japan, the forecast annual volumes of investment are lower: USD 16.2 billion compared to 21.2 billion and 20 billion compared to 21.8 billion, respectively. For all other countries, these figures are much higher.

6. Conclusions

The transition from fossil fuels to renewable energy will be a lengthy process, potentially taking decades or even generations, according to JPMorgan [14]. The third-largest investment enterprise in the world cites economic factors such as high interest rates, government debt, and geopolitical tensions as obstacles. The massive investment required may force governments to scale back their ambitious climate change goals. Additionally, the current low returns on renewable energy investments and the risk of social unrest in case of soaring energy prices are further concerns. Wood Mackenzie echoes these sentiments [88], emphasizing that rising interest rates will exacerbate the difficulties and costs of achieving a net-zero global economy. Essentially, both financial institutions are urging a more realistic and pragmatic approach to the energy transition, acknowledging the significant challenges ahead.

The unevenness of the energy transition process must be seriously considered for establishing a renewed global agenda for decarbonization strategies. Maintaining the current observed trend and considering the unfolding of historical data on the share of the usage of primary energy from low-carbon sources, the logistic fit extrapolation indicates that by 2040 (ceteris paribus), we can reach only about 22.5%, far below what is expected by the United Nations’ Green Agenda. Therefore, the observed unevenness is paving the way to a slowdown of green transition. As per JPMorgan’s warning in Section 3 [14], a rigorous and critical assessment is urgently necessary for phasing out fossil fuels. In the same vein, the most recent IRENA report [13] claims that despite the growth and effort observed in developing renewable energy sources, such progress should ensure fair and balanced advancement. Figure 14 presents the logistic forecast of the share of primary energy from low-carbon sources up to 2040.

The assessment-based analysis conducted reveals that the six countries under consideration have different energy transition strategies due to the very distinct characteristics of their national economies. As a limitation, Russia is not included in the analysis of energy investment section, as data were scarce and could not provide sufficient input for the analysis. These differences are what make the approaches unique from one another. In

Table 9. Summary of the scenarios and the Green Agenda announcement and implementation in the observed countries.

Country	Pragmatic Approach	Scenario
		Realistic	Conservative	Green Agenda
				Announcement	Implementation
Brazil	+	+	+	−	−
China	+	+	−	−	−
Germany	−	(+)	−	+	+
Japan	+	+	−	+	+
Russia	+	+	+	−	−
India	−	−	−	+	+

, a summary of the exposed assessment of the respective scenarios observed for the six countries is presented (the existence of a certain scenario or approach is marked by ‘+’, otherwise marked by ‘−’).

In our understanding, the Green Agenda is the most ambitious and the most advanced energy transition scenario, and three countries, Germany, Japan, and India, have such plans (marked by ‘+’ in Table 9). But as we see it, Japan has chosen a more pragmatic approach. Germany’s voluntary and politically motivated decision to close all nuclear power plants represents a significant turning point in the debate on the balance between goal setting and economic expediency. Only time will determine the full consequences of this decision. For this reason, it appears as (+) in Table 9. On the other hand, Japan’s choice to develop nuclear energy despite the negative repercussions of the Fukushima accident exemplifies other political decisions driven by economic expediency, where pragmatic goals and objectives guide energy approaches. India has ambitious plans with two clearly set goals and only financial investments might get in the way to achieve these goals, which suggest that India’s vision is more idealistic. China, the world’s second-largest economy, intends to maintain a 30% share of coal generation by 2050, despite its leadership in the development of solar and wind energy. This indicates that pragmatism and what is economically comfortable for China are driving its goals. Russia and Brazil are also guided by pragmatic goals, not setting as their goal the implementation of the Green Agenda.

Looking at the data on oil and natural gas production, the United States emerges as the world leader in 2022, surpassing Saudi Arabia by 75% in daily oil production and the Russian Federation by 33% in annual natural gas production [90,91]. These figures highlight the importance of these resources for export and the development of new markets, rather than solely meeting domestic demand. This demonstrates the presence of sober calculation and pragmatism, which often sideline the Green Agenda.

Considering the main driving factors presented in this research paper, two sets of dimensions could be identified along which future scenarios could be presented: the pace of green transition is the main dimension in both cases, while technology and resources are the other dimensions for future scenarios. Figure 15 and Figure 16 illustrate possible exploratory scenarios regarding the green transition according to the identified dimensions and present the place of the observed countries on the horizon based on their Green Agenda policy.

Essentially, we are witnessing how the “climate agenda” is increasingly becoming an instrument of economic influence. Major economies have greater freedom in determining their own energy strategies. While the transition to green energy theoretically promises benefits for all, the uneven economic development means that technologically advanced countries tend to be the primary beneficiaries. As we have shown earlier, there is no need to harbor illusions about large volumes of investment in solar and wind energy. Another natural barrier to green energy is the limited availability of necessary materials for large-scale solar and wind power, which could significantly impact the pace of the energy transition. There are three potential ways to address this situation. The first involves achieving a more balanced energy mix by imposing restrictions on the use of natural materials, which exist in limited supply [92]. The second option involves transitioning to technologically innovative energy sources that have not yet been industrially mastered. Currently, hydrogen is considered as such a promising low-carbon source. On the horizon until 2050, investments of USD 1.2 trillion are required if we are aiming to have a share of hydrogen in global final energy consumption of at least 10% [93]. The third way is associated with the dynamic development of nuclear energy, especially small nuclear power plants [16]. It is at the intersection of these options that national energy transition strategies should be built, considering each country’s specific circumstances. We also cannot ignore new realities where the transition from fossil fuels to renewables could take “generations” to reach net-zero targets [94].