Several governments and investor groups have thrown their weight behind a set of climate-friendly recovery measures from the International Energy Agency that would harness massive coronavirus stimulus packages to help lead a green transition.
The new plan, which would cost $1tn annually over three years, envisages a broad shift to clean power as well as new investments in areas such as electric vehicles and biofuels.
“Even a government who is not interested in climate change . . . should still stick to these energy policies because they will create growth,” said Fatih Birol, head of the IEA.
The transformation outlined in the IEA report, which spans 2021-23, would create 9m jobs a year and help cut annual greenhouse gas emissions by 4.5bn tonnes once the measures are implemented, it said.
The IEA analysis, conducted in collaboration with the IMF, outlines more than 30 recommendations, including further investment in electricity grids and more support for wind and solar energy.
Mr Birol said the measures would help prevent a rebound in pollution as countries emerge from coronavirus lockdowns, and would keep carbon emissions on a declining path. “With that, we can be sure that 2019 was the peak in emissions,” he said.
Global emissions are expected to drop 8 per cent this year, their biggest decline since the second world war.
Government including Spain and Denmark, as well as a group of investors representing more than £10tn in assets, welcomed the recommendations in the IEA report.
“We agree with the IEA that the world is to remain vigilant so that emissions do not pick up as the economy bounces back to normal,” said Teresa Ribera, Spain’s vice-president for the ecological transition.
“The [plan] the special report puts forward shows that it is possible for the world to turn 2019 into the definitive peak in global emissions,” she added.
Dan Jorgensen, Danish climate minister, said: “This report clearly shows that economic recovery and job creation go hand in hand with the green energy transition. The IEA’s ‘sustainable recovery plan’ shows us the way forward.”
The IEA report follows an Oxford university study last month — carried out by economists including Joseph Stiglitz and Nicholas Stern — that found green stimulus measures would boost economic growth in the wake of the coronavirus recession.
The European Commission made climate programmes a centrepiece of its €1.85tn recovery effort, although the plan is still being debated by member states.
Institutional investors have also been calling for green stimulus measures, and a coalition of asset managers including BNP Paribas and Lloyds Banking Group wrote to EU leaders this month.
The Institutional Investors Group on Climate Change, which represents more than 230 asset managers, welcomed the IEA report. “Investors want Covid-19 economic recovery plans that deliver a cleaner future,” said Stephanie Pfeifer, chief executive of IIGCC. “The IEA has shown this is not only desirable, but economically astute and essential in addressing the climate crisis.”
As European countries begin to shape their recovery plans, several including Germany have already announced stimulus packages that include green measures such as subsidising electric cars. Many countries including the UK have not yet announced their stimulus plans.
Mr Birol said he hoped countries would seize the opportunity to fund transformation in the energy industry, pointing out that 3m jobs had already been lost in the sector this year as a result of the pandemic and low oil prices.
“We are well aware that climate is not the only challenge that governments are facing” he said. “There is a risk that the global economy is melting. I share this concern, but there is also a risk that the polar ice is melting.”
Some climate groups criticised the IEA’s recommendations, saying they did not go far enough or fast enough to prevent dangerous global warming.
The report “misses the mark on fossil fuel subsidies”, said Kelly Trout, analyst at Oil Change International, a US non-profit group that lobbies against the fossil fuel industry. The IEA was too focused on reducing consumption subsidies, she added, and stopped short of calling for all fossil fuel subsidies to be removed.
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