What is United States's pathway to limit global warming to 1.5°C?

This is significantly below (more than 50%) the level required under the Highest Possible ambition scenario, which sees annual investment in renewables reach an average USD 173 bn between 2026-2030 and USD 170 bn annually between 2031-2035. As end-use sectors rapidly electrify and electricity demand grows, investment in renewables capacity is frontloaded under the HPA, with average annual investments between 2026-2035 essentially double what’s foreseen between 2041-2050. Between now and 2035, annual investments in wind and solar and other renewables would have to essentially double. In total, renewable capacity investment requirements between now and 2050amount to USD 3.3 trillion, corresponding to a total installed renewable capacity of 5.29 TW.

The investment figures presented here focus exclusively on generation capacities (solar and wind) and therefore reflect only part of the overall system transformation. A fully decarbonised power system requires substantial additional investments in grid infrastructure, storage, and system flexibility. Transmission and distribution expansion, battery storage deployment, and system digitalisation are critical to integrate high shares of variable renewable energy and ensure system reliability. These additional investments can significantly increase total system costs but are necessary to enable the transition.

Unlocking the deep integration of wind and solar foreseen in the HPA scenario will require the US to successfully manage transmission and distribution challenges: dramatic increases in energy demand due to electrification and additional demand from data centres and a shifting energy mix. Currently, transmission system operators spend roughly 35 bn USD per year on transmission infrastructure²³23 and the federal government has announced 1.9 bn USD in additional funding, but chronic underfunding has left an investment gap which is estimated to be in the hundreds of billions.²⁴24^,2525

In contrast, over the past 5 years, annual investments in fossil fuels in the United States averaged over 200bn USD – in 2025, investments in fossil fuels amounted to 211bn USD.²⁶26

The transition also has important labor market implications: while jobs in fossil fuel-based power generation may decline, new employment opportunities are created in renewable energy development, grid infrastructure, and relates services. Overall, the power sector transition delivers a broad set of co-benefits that strengthen economic resilience. In the United States, roughly 800,000 people work in clean energy generation and transmission and clean energy job growth continues to outpace overall employment growth, however under the Trump administration this trend is questionable as policy unpredictability and funding recissions make the development of renewables less appealing to investors.²⁷27

Meeting the investment needs set out in the HPA scenario requires decisive public policy action to de-risk investments and mobilise private capital at scale. The United States had already made significant progress in this area under the Inflation Reduction Act but actions taken by the Trump administration have reversed this progress, cancelling key tax incentives and increasing uncertainty and risk for investors.²⁸28Fossil fuel companies receive subsidies amounting to nearly 35 bn USD per year through tax credits and waivers and direct spending, 4bn USD of which was directly enacted by the Trump administration.²⁹29

In lieu of federal action and in the face of a highly fragmented power system, states are critical policy actors and have supported the ongoing growth of renewable capacity. States offer different models of policy development to close the investment gap, allowing others to pick and choose what works best. Texas has the largest wind and solar growth in the country, supported by a deregulated energy market and friendly investment environment characterized by the use of financial incentives like tax credits and rebates, Renewable Energy Zones to streamline permitting and transmission development, and a free energy market that means that as wind and solar get cheaper, they become the most profitable source of electricity.³⁰30^,3131 An alternative approach primarily seen in Democrat-led states like California focuses on regulation shaping the market, where carbon prices, renewables targets and emissions standards are used to provide stability , clarity and direction to energy developers while gradually integrating renewables. However, predictable policy and stable revenue frameworks will be critical to meeting the HPA scenario and deep integration of renewables will ultimately likely require significant changes at the federal level. Nation-wide carbon pricing and emissions standards and regulatory and permitting reform in addition to public funding are critical levers to de-risk the investment environment and mobilise private capital.