Governments around the world can “supercharge their recovery, become more resilient to crises, and save trillions of dollars,” while setting sights on deep greenhouse gas emission reductions by 2050, by directing stimulus funding in response to the COVID-19 pandemic to green infrastructure, Forbes magazine reports, citing a new release this week from the International Renewable Energy Agency (IRENA).
The plan would cost 15% to about 37% more through 2050 than investments governments are already planning, but would deliver “massively” larger cost savings and socio-economic gains, the Abu Dhabi-based agency says. Overall, the approach would deliver US$98 trillion in benefits over a business as usual scenario, delivering $3 to $8 in benefits for every dollar invested, The Guardian adds.
“We are now insisting that we can work in a way that can connect the short-term response to COVID-19 with the long-term provision of an economy that can be healthy, wealthy, and give opportunities to everyone,” said IRENA Director General Francesco La Camera.
The economic crisis triggered by the pandemic has “exposed deeply embedded vulnerabilities of the current system,” he added. Countries “are facing a difficult task of bringing the health emergency under control while introducing major stimulus and recovery measures.” But “by accelerating renewables and making the energy transition an integral part of the wider recovery, governments can achieve multiple economic and social objectives in the pursuit of a resilient future that leaves nobody behind.”
But “economies need more than a kick-start,” the report warns. “They need stable assets, including an inclusive energy system that supports low-carbon development. Otherwise, even with the global slowdown momentarily reducing carbon dioxide (CO2) emissions, the eventual rebound may restore the long-term trend. Fossil-fuel investments would continue polluting the air, adding to healthcare costs and locking in unsustainable practices.”
The report “claims that current global investment plans will cost US$95 trillion to maintain a course of ‘business as usual’, while a decarbonization path totalling $110 trillion would create ‘massive’ socio-economic gains, generating savings of between $50 trillion and $142 trillion by 2050,” and cutting carbon by 70%, enough to meet the Paris Agreement target of keeping average global warming “well below” 2.0C, Forbes says. That path, IRENA’s Transforming Energy scenario, would also quadruple renewable energy jobs to 42 million, employ tens of millions more in related sectors, boost global GDP by 2.4%, and “produce a 13.5% rise in global welfare indicators such as health and education.”
The more ambitious Deep Decarbonization scenario would cost $130 trillion, but “accrue even larger dividends while keeping warming within the Paris Agreement’s recommended ceiling of 1.5°C,” Forbes adds.
The report identifies five pillars—electrification, system flexibility, renewable energy, green hydrogen, and innovation—that will deliver a near-zero or zero-carbon global economy, Forbes adds. “Renewables could play a greater role in cutting carbon emissions from heavy industry and transport to reach virtually zero emissions by 2050, particularly by investing in green hydrogen,” The Guardian explains. “The clean-burning fuel, which can replace the fossil fuel gas in steel- and cement-making, could be made by using vast amounts of clean electricity to split water into hydrogen and oxygen elements.”
But “the report’s authors sound a warning, noting a ‘widening gap between rhetoric and action’ from governments on climate change, and that global CO2 emissions have risen by an average of 1% every year over the last decade,” the publication states. “The authors also draw attention to recent record low oil prices, which they say indicate the volatility of fossil fuel markets, compared with the improved energy security associated with renewable energy generation.”
Ignacio Galán, chair and CEO of Spanish renewables giant Iberdrola, said the company will continue investing billions in renewables, grids, and energy storage. “A green recovery is essential as we emerge from the COVID-19 crisis,” and “the world will benefit economically, environmentally, and socially by focusing on clean energy,” he told The Guardian. “Aligning economic stimulus and policy packages with climate goals is crucial for a long-term viable and healthy economy.”
But the IRENA report received a mixed review from Charles Donovan, executive director of the Centre for Climate Finance and Investment at Imperial College London. “This report supports with facts and figures what we’ve known for many years,” he told Forbes. “Getting off fossil fuels and moving on to renewables is technically feasible, and affordable. It will deliver jobs and a vast improvement in public health.”
But “while the report makes clear where we need get to over decades, it steers clear of the interventions needed now to bend the curve on carbon emissions,” he added. “Historically low oil and natural gas prices provide governments with the perfect moment to change course. By scrapping wasteful energy subsidies and raising new taxes on fossil fuel producers, carbon dividends would put money back into consumers’ hands while levelling the playing field in energy.”