IEA CHIEF TO HEADS OF STATE AND GLOBAL BANKS: USE RECOVERY TO QUICKEN CLEAN ENERGY TRANSITION

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17 march 2020

Governments have ‘historic opportunity’ to accelerate clean energy transition, IEA says

IEA head Fatih Birol is calling on heads of state and international financial institutions to make coronavirus recovery plans sustainable


By Chloé Farand, Climate Home News, March 17, 219

Political and financial leaders have “a historic opportunity” to usher in a new era for global climate action with economic stimulus packages to confront the coronavirus pandemic, the head of the International Energy Agency (IEA) has said.

In an interview with Climate Home News on Tuesday, Fatih Birol said stimulus packages to prop up economic recovery marked a critical moment for governments to “shape policies” in line with climate action.

“I am talking with several governments and international financial institutions leaders because they are all busy designing stimulus programmes for the economy – the plans they will put together will be extremely important,” he said.

“This is the reason I am telling them that we can use the current situation to step up our ambition to tackle climate change.”

Birol said he had urged political and global financial leaders to design “sustainable stimulus packages” that focus on investing in clean energy technologies and accelerate the transition away from fossil fuels.

“This is a historic opportunity for the world to, on one hand, create packages to recover the economy, but on the other hand, to reduce dirty investments and accelerate the energy transition,” he said.

The health crisis has hammered the economy in the week since the World Health Organisation declared coronavirus a pandemic. Stock markets have seen some of their toughest days of trading, sparking fears of a global economic recession.

The aviation industry has come under particularly strains in recent weeks, with a number of airlines announcing a dramatic scale-back of their operations and executives calling for government bailouts to avoid bankruptcy.

“The global economy is going through very difficult times and the energy sector is disproportionately affected,” said Birol. “Aviation represents 1% of the global economy but it’s 8% of global oil consumption.”

“I understand that when I talk to governments, they are very much preoccupied with the current economic turmoil but we should keep the eye on the ball that is addressing climate change,” he said.

Birol was speaking before reports in US media that President Donald Trump would be seeking an $850 billion stimulus package, including $50 billion for airlines.

Last year, a report by UN Environment found the world needed to cut emissions by 7.6% per year until 2030 to limit global warming to 1.5C by the end of the century – the tougher temperature goal countries committed to under the Paris Agreement.

In most recent years, global emissions have increased but they stagnated in 2019, according to an IEA analysis.

Birol insisted 2019 could mark a definite peak in emissions, but only if governments seized interventions to recover from the impacts of the coronavirus as the moment to gear the economy towards a green transition.

“It may well be the case that we will see 2020 emissions decline. In my view, this is not a reason to celebrate because emissions reduction should be the result of right energy policies,” he said.

In a statement last week, Birol wrote that such policies could include large-scale investments in clean energy technologies such as solar, wind, hydrogen and carbon capture and storage technologies.

The massive investment plan outlined by Birol echoed proposals such as the EU Commission’s “green deal for Europe” aimed at accelerating the shift of capital towards the green economy while creating climate-proof jobs.

The IEA has previously come under criticism for underplaying the speed of renewable energy deployment and for not considering the Paris Agreement’s more ambitious target of 1.5C in its influential World Energy Outlook scenarios.

Birol also advocated for countries to capitalise on low interest rates to boost innovation on hydrogen and carbon capture and storage technology, and use the opportunity of steep reductions in oil prices to cut fossil fuel consumption subsidies.

The IEA estimates annual fossil fuel consumption subsidies are worth $400 billion worldwide, 40% of which are used to make oil products cheaper.

Birol expressed optimism governments could bend the emissions growth curve this year because of a number of favourable factors.

An IEA analysis found that 70% of global energy investments is driven by governments directly or indirectly as a response to policy. Meanwhile, the low cost of clean energy strengthens the economic case for the clean energy transition to drive stimulus packages.

“This is a huge opportunity we cannot miss,” he said. “Here the issue is not only the level of money [dedicated to stimulate the economy] but the direction of the money,” he said.

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FROM A CLIMATE HOME NEWS EMAIL OF MARCH 20:
(An introduction to the article above

In 2009, the United Nations called for a "Global Green New Deal" to break dependence on fossil fuels and create sustainable jobs after the financial crisis ravaged the world economy.

Under the plan, UN Environment urged massive investments in energy efficiency for buildings, a boost for wind and solar energy, cuts in fossil fuel subsidies and a host of other measures. It reckoned the bill would amount to 1% of global GDP, or about $750 billion.

But the global economy rebounded, still reliant on fossil fuels, despite efforts to diversify. Carbon dioxide emissions grew by a huge 5.8% in 2010, after a 1.4% dip in 2009, and have risen most years since.

Will the coronavirus pandemic, which has killed more than 10,000 people worldwide, offer a new chance to shape a greener, more sustainable world when the economy revives?

Read Chloé Farand's insightful interview with Fatih Birol, the head of the International Energy Agency, in which he says governments have a "historic opportunity" to usher in an era of climate action when they design long-term stimulus packages.

"Well put @IEABirol," Christiana Figueres, the former head of UN Climate Change and an architect of the Paris Agreement, commented about the article in a tweet. "We have a massive crisis = opportunity on our hands. We cannot afford to waste it. Recovery must be green."

In recent years, the idea of green new deals - which echo US President Franklin Roosevelt's 1930s New Deal after the Great Depression - have caught on in many nations as a way to combat the climate crisis.

And the world now has a lesson to learn from the failings a decade ago.

"We have a responsibility to recover better" than after the financial crisis, UN Secretary-General António Guterres said on 19 March, saying the global health crisis was unlike any in the 75-year history of the UN.

"We have a framework for action – the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change. We must keep our promises for people and planet," he added.

The task is daunting. The UN says global cuts in greenhouse gas emissions of 7.6% a year are needed over the next decade to get on track to limit global warming to 1.5C above pre-industrial times.

But the Covid-19 emergency has opened a new window for a clean energy transition for the world economy.


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