On March 14, 2020, on the International Energy Agency (“IEA”) website was published an article by the IEA Executive Director Dr. Fatih Birol on the global impact of the COVID-19 pandemic on human life and health, the functioning of the national world economies and potential methods of countering the virus.
The coronavirus is turning into an unprecedented international crisis, with serious repercussions for people’s health and economic activity. As governments respond to these interlinked crises, they must not lose sight of a major challenge of our time: clean energy transitions. Because, the threat posed by climate change, which requires us to reduce global emissions significantly this decade, will remain. Governments are drawing up stimulus plans in an effort to counter the economic damage from the coronavirus. These stimulus packages offer an excellent opportunity to ensure that the essential task of building a secure and sustainable energy future doesn’t get lost amid the flurry of immediate priorities. In addition, the costs of key renewable technologies are far lower than during previous periods and is in a much better shape than in the past. Thus, large-scale investment to boost the development, deployment and integration of clean energy technologies should be a central part of governments’ plans because it will bring the twin benefits of stimulating economies and accelerating clean energy transitions and can make a lasting difference to our future.
This situation is a test of governments and companies’ commitment to clean energy transitions when market conditions become more challenging. The sharp decline in the oil market may well undermine clean energy transitions by reducing the impetus for energy efficiency policies. This would be very bad news, since improvements in energy efficiency, a vital element for reaching international climate goals, have already been weakening in recent years. Governments can address this by pursuing policies that have already proved successful previously, such as measures to improve the energy efficiency of buildings, which create jobs, reduce energy bills and help the environment. The recent steep drop in oil prices is also a great opportunity for countries to lower or remove subsidies for fossil fuel consumption. There are around USD 400 billion of these subsidies worldwide today, and more than 40% of them are to make oil products cheaper.
We may well see CO2 emissions fall this year as a result of the impact of the coronavirus on economic activity. But it is very important to understand that this would not be the result of governments and companies adopting new policies and strategies, so it would most likely be a short-term blip. Real, sustained reductions in emissions will happen only if governments and companies fulfill the commitments that they have already announced – or that they will hopefully announce very soon. Governments can use the current situation to step up their climate ambitions and launch sustainable stimulus packages focused on clean energy technologies.
The IEA`s article is available at link: https://www.iea.org/commentaries/put-clean-energy-at-the-heart-of-stimulus-plans-to-counter-the-coronavirus-crisis