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IEA poses $1tn/y sustainable recovery plan
The International Energy Agency (IEA) has outlined a sustainable recovery plan focusing on a series of actions that can be taken over the next three years to revitalise economies and boost employment while making energy systems cleaner and more resilient.
Set out in a , the plan offers an energy sector roadmap for governments to spur economic growth, create millions of jobs and put global emissions into structural decline. By integrating energy policies into government responses to the economic shock caused by the COVID-19 crisis, the plan would also accelerate the deployment of modern, reliable and clean energy technologies and infrastructure, says the IEA.
Based on detailed assessments of more than 30 specific energy policy measures, the Sustainable Recovery Plan considers cost-effective approaches, the circumstances of individual countries, existing pipelines of energy projects and current market conditions. It spans six key sectors – electricity, transport, industry, buildings, fuels and emerging low-carbon technologies.
The plan sets out the policies and targeted investments for each key sector, including measures designed to accelerate the deployment of low carbon electricity sources like new wind and solar, and the expansion and modernisation of electricity grids; increasing the spread of cleaner transport such as more efficient and electric vehicles, and high-speed rail; improving the energy efficiency of buildings and appliances; enhancing the efficiency of equipment used in industries such as manufacturing, food and textiles; making the production and use of fuels more sustainable; and boosting innovation in crucial technology areas including hydrogen, batteries, carbon capture utilisation and storage (CCUS) and small modular nuclear reactors.
In an analysis carried out in cooperation with the International Monetary Fund (IMF), the report shows that the set of policy actions and targeted investments over the 2021–2023 period that are outlined in the plan could boost global economic growth by an average of 1.1% a year; save or create roughly 9mn jobs a year and reduce annual global energy-related greenhouse gas (GHG) emissions by a total of 4.5bn tonnes by 2023.
In addition, the plan would deliver other improvements to human health and well-being, including driving a 5% reduction in air pollution emissions, bringing access to clean-cooking solutions to around 420mn people in low-income countries, and enabling nearly 270mn people to gain access to electricity.
Achieving these results would require global investment of about $1tn/y over the next three years. This sum represents about 0.7% of today’s global GDP and includes both public spending and private finance that would be mobilised by government policies.
‘Governments have a once-in-a-lifetime opportunity to reboot their economies and bring a wave of new employment opportunities while accelerating the shift to a more resilient and cleaner energy future,’ comments Dr Fatih Birol, Executive Director, IEA. ‘Policy makers are having to make hugely consequential decisions in a very short space of time as they draw up stimulus packages. Our Sustainable Recovery Plan provides them with rigorous analysis and clear advice on how to tackle today’s major economic, energy and climate challenges at the same time. The plan is not intended to tell governments what they do. It seeks to show them what they do.’
Recent IEA analysis has shown that global energy investment is set for an unprecedented plunge of 20% in 2020, raising serious concerns for energy security and clean energy transitions. As a result of the Sustainable Recovery Plan, the global energy sector would become more resilient, making countries better prepared for future crises. Investment in enhancing electricity grids, upgrading hydropower facilities, extending the lifetimes of nuclear power plants, and increasing energy efficiency would improve electricity security by lowering the risk of outages, boosting flexibility, reducing losses and helping integrate larger shares of variable renewables such as wind and solar PV. Electricity grids, the backbone of secure and reliable power systems, would see a 40% increase in capital spending after years of declining investment. This would put them on a stronger footing to withstand natural disasters, severe weather and other potential threats, says the IEA.
The Sustainable Recovery Plan is designed to avoid the kind of sharp rebound in carbon emissions that accompanied the economic recovery from the 2008–2009 global financial crisis and instead put them into structural decline. The IEA report highlights key aspects of today’s situation that make it a unique opportunity for government action. Compared with the 2008–2009 crisis, the costs of leading clean energy technologies such as wind and solar PV are far lower, and some emerging technologies like batteries and hydrogen are ready to scale up. Global carbon emissions flat-lined in 2019 and are set for a record decline this year. While this drop, which results from economic trauma, is nothing to celebrate, it provides a base from which to put emissions into structural decline.
‘This report lays out the data and analysis showing that a cleaner, fairer and more secure energy future is within our reach. The Sustainable Recovery Plan would make 2019 the definitive peak in global emissions, putting them on a path towards achieving long-term climate goals,’ Dr Birol says.