Governments all over the world are deploying unprecedented amount of fiscal support targeted at stabilizing and rebuilding their economies, but only about 2 per cent of this has been allocated to clean energy measures, according to the International Energy Agency.
Considerably, Governments have mobilized US$16 trillion in fiscal support throughout the Covid-19 pandemic, with most of it focusing on emergency financial relief for households and firms.
However, the total amount in consideration from both public and private sources for recovery plans fall short of what is needed to reach international climate goals, IEA indicated. Meanwhile, these shortfalls are particularly pronounced in emerging and developing economies, many of which face huge financing challenges.
Based on new analysis by IEA, governments’ current recovery spending plans, global carbon dioxide (CO2) emissions are set to climb to record levels in 2023 and continue rising in the following years. Accordingly, this would leave the world far from the pathway to net-zero emissions by 2050 that the IEA set out in its recent Global Roadmap to Net Zero.
Commenting on the new analysis, Dr. Faith Birol, the IEA Executive Director indicated:
“Since the Covid-19 crisis erupted, many governments may have talked about the importance of building back better for a cleaner future, but many of them are yet to put their money where their mouth is. Despite increased climate ambitions, the amount of economic recovery funds being spent on clean energy is just a small sliver of the total.”
Current efforts towards spending on clean energy
In a previously released ‘Sustainable Recovery Plan’ during the pandemic, the IEA recommended US$1 trillion of spending globally on clean energy measures that could feature prominently in recovery plans.
According to the Plan which was developed in collaboration with the International Monetary Fund, the spending would boost global economic growth, create millions of jobs and put the world on track to meet the Paris Agreement goals.
Based on IEAs tracker developed from the Plan, it estimates that current government plans would only increase total public and private spending on clean energy to around USD 350 billion a year by 2023 – only 35 per cent of what is envisaged in the Plan.
“Not only is clean energy investment still far from what’s needed to put the world on a path to reaching net-zero emissions by mid-century, it’s not even enough to prevent global emissions from surging to a new record. Many countries – especially those where the needs are greatest – are also missing the benefits that well planned clean energy investment brings, such as stronger economic growth, new jobs and the development of the energy industries of the future.
“Governments need to increase spending and policy action rapidly to meet the commitments they made in Paris in 2015 – including the vital provision of financing by advanced economies to the developed world,” Dr Faith Birol added.
“But they must then go even further by leading clean energy investment and deployment to much greater heights beyond the recovery period in order to shift the world onto a pathway to net-zero emissions by 2050, which is narrow but still achievable – if we act now.”
Dr. Faith Birol, IEA Executive Director
READ ALSO: Delays, partial disbursement of DACF impede MMDAs development plans- ACEP
