Recently published analysis by the International Energy Agency under its Sustainable Recovery Tracker shows that governments worldwide are deploying an unprecedented amount of fiscal support aimed at stabilising and rebuilding their economies. However, from the US$16 trillion mobilised for COVID-19 economy recovery plans, only about 2% of this spending has been allocated to clean energy measures.
The total spending on renewable energy by both public and private sectors worldwide falls well short of what is needed to reach international climate goals. These shortfalls are particularly pronounced in emerging and developing economies, many of which face particular financing challenges.
Under 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. 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.
Increased spending of clean energy good for economic recovery
IEA’s Sustainable Recovery Tracker will help policy makers assess how far recovery plans are moving the needle on climate. The new online tool is a contribution to the G20 Ministerial Meeting on Environment, Climate and Energy in Naples, which takes place on 22 and 23 July under the Presidency of Italy.
The Tracker monitors government spending allocated to sustainable recoveries and then estimates how much this spending boosts overall clean energy investment and to what degree this affects the trajectory of global CO2 emissions. The Tracker considers over 800 national sustainable recovery policies in its analysis, which are publicly available on the IEA website.
“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,” said Fatih Birol, the IEA Executive Director.
According to the IEA, an estimated annual spending of USD 1 trillion on clean energy globally would boost global economic growth, create millions of jobs and put the world on track to meet the Paris Agreement goals.