Spending on clean energy makes up only 3 per cent of the US$16.9 trillion that governments have so far mobilised to get their economies back on track from the economic impact of the COVID-19 pandemic, according to the International Energy Agency (IEA).
Although this represents a rise in share from around 2 per cent in July 2021, it still leaves global CO2 emissions on an upward trajectory. And the global economy may be approaching a year with the second largest annual increase in history, IEA noted.
In the past three months, governments have increased the amount of their economic recovery spending earmarked for clean energy investment. However, spending has been highly uneven geographically in favour of developed economies. Meanwhile, this also falls behind what is needed to get global emissions decline sustainably.
Dr Fatih Birol, the IEA Executive Director commented: “we are witnessing an uneven and unsustainable recovery from last year’s economic crisis. [This marks] a recovery that consists of huge growth in fossil fuel consumption while leaving behind nearly 80% of the world’s population in the shift towards a new and cleaner energy economy.
“On the eve of the G20 Leaders’ Summit and the COP26 Climate Change Conference, governments of major economies need to show they are ready to drive a massive scaling up of investments in clean energy globally… Failure to put their money where their mouth is could well mean failure to keep the door open to limiting global warming to 1.5 °C.”Dr. Fatih Birol, IEA Exec. Director
For the past three months, 40 new funding arrangements towards clean energy investments have been made, in addition to the 140 previously announced spending programmes. In total, governments have earmarked an estimated US$470 billion for clean energy investment between now and 2030.
Massive Clean Energy Investments Needed in Developing Economies
Based on IEA’s analysis, this proves that advanced economies are making strong moves towards sustainable recoveries. Nevertheless, the global total is only 40 per cent of what is required per IEA’s Sustainable Recovery Plan.
Notably, some advanced economies such as the US, France, Japan and the United Kingdom are making efforts to create and approve new investment programmes. Advanced economies could leverage on this and stay within the ambit of their share of the Sustainable Recovery Plan.
On the flip side, emerging and developing economies which require majority of clean energy investments in the next decade are being left behind. Considering clean energy spending among emerging and developing economies, only 20 per cent of the level recommended in the Sustainable Recovery Plan is being covered.
“The shortfall in sustainable recovery spending in emerging and developing economies is a global problem that requires a global solution. These countries don’t have the luxury of cheap financing that many advanced economies enjoy.
“The world urgently needs to come up with bold measures to mobilise and channel clean energy investment to emerging and developing economies on a major scale. This is where it is needed most and has the biggest bang for its buck in tackling emissions.”Dr Fatih Birol, IEA Exec. Director