As per the governments’ current recovery spending plans, in 2023, global CO2 emissions are set to rise to record levels and will continue surging in the coming years. This would hinder the pathway to net-zero emissions by 2050 that was set out by the IEA in its recent Global Roadmap to Net Zero.
Rather than allocating to clean energy measures, governments all around the world are deploying an unprecedented amount of fiscal support focused on stabilising and rebuilding their economies. As per the new analysis from International Energy Agency (IEA), nearly 2% of this spending has been assigned to clean energy measures.
These findings are from the new Sustainable Recovery Tracker that the IEA released recently. The new online tool is a contribution to the G20 Ministerial Meeting on Environment, Climate and Energy in Naples. Under the Presidency of Italy, it takes place on 22 and 23 July.
The Tracker monitors spending of government assigned to sustainable recoveries and then approximates to what degree this affects global CO2 emissions trajectory and how much this spending raises overall clean energy investment. The Tracker contemplate over 800 national sustainable recovery policies in its analysis. The tracker assists policy makers to assess how far recovery plans are moving the needle on climate. This plan was developed in collaboration with the International Monetary Fund.
Dr Fatih Birol, the IEA Executive Director, said, “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.”
Throughout the Covid-19 pandemic, governments have deployed USD 16 trillion in fiscal support, most of it is aimed on emergency financial relief applicable on households and firms. During the initial phase of COVID-19, the IEA released the Sustainable Recovery Plan, which suggested USD 1 trillion of spending worldwide on clean energy measures that could feature in recovery plans. As per plan, this spending would create millions of jobs, boost global economic growth, and put the world in line to meet the Paris Agreement goals.
All the key sectors mentioned in the IEA Sustainable Recovery Plan, are not receiving enough attention from the officials, as per the tracker. By 2023, current government plans would only escalate total public and private spending on clean energy to around USD 350 billion a year – only 35% of what is predicted in the Plan.
The Tracker shows the stark geographic disparities that are emerging in clean energy investment. The majority of funds are being mobilised in advanced economies, which are approximately 60% of the investment levels envisaged in the Sustainable Recovery Plan. Emerging and developing economies, many of which have limited fiscal scope, have so far deployed only about 20% of the suggested spending levels.
Dr Birol said, “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. 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,” he added.