The world’s governments can either spend the next three years and US$3 trillion entrenching the greenhouse gas emission cuts that accompanied the pandemic lockdown and creating a new narrative on climate change, or allow a record increase in oil demand next year that will push consumption back toward historic levels, the International Energy Agency warned this week.
Moreover, the next six months will determine whether countries can change course and “prevent a post-lockdown rebound in greenhouse gas emissions that would overwhelm efforts to stave off climate catastrophe,” The Guardian reports, citing the IEA.
“This year is the last time we have, if we are not to see a carbon rebound,” Executive Director Fatih Birol said yesterday.
“The next three years will determine the course of the next 30 years and beyond,” he told the Guardian. “If we do not [take action] we will surely see a rebound in emissions. If emissions rebound, it is very difficult to see how they will be brought down in future. This is why we are urging governments to have sustainable recovery packages.”
With the release of its monthly Oil Market Report Tuesday, the Paris-based agency said daily oil demand could grow by 5.7 million barrels in 2021, after falling by 8.1 million barrels during the pandemic.
“Global oil demand could return to pre-crisis levels as soon as 2022 if governments avoid a second wave of the coronavirus outbreak and restart the aviation industry, without putting in place new plans to accelerate clean energy investment,” The Guardian writes. Birol added that an “overhyped” moment of peak oil won’t materialize unless governments adopt a green recovery and accelerate their clean energy investments.
“I want to repeat, video conferencing alone will not solve our energy and climate challenges. We need [the] right government policies,” Birol said. “A change in lifestyle will not bring us a peak and a decline in oil demand.”
Two days later, in what amounted to a kind of solo call-and-response, the IEA laid out what The Guardian calls “the first global blueprint for a green recovery, focusing on reforms to energy generation and consumption. Wind and solar power should be a top focus, the report advised, alongside energy efficiency improvements to buildings and industries, and the modernization of electricity grids.”
The report concluded that “creating jobs must be the priority for countries where millions have been thrown into unemployment by the impacts of the COVID-19 pandemic and ensuing lockdowns,” the UK-based paper adds. “The IEA’s analysis shows that targeting green jobs—such as retrofitting buildings to make them more energy efficient, putting up solar panels, and constructing wind farms—is more effective than pouring money into the high-carbon economy.”
The IEA projected nearly nine million jobs per year flowing from a sustainable recovery plan, including 1.9 million from buildings and efficiency, 1.1 million from wind and solar, 860,000 in power networks, 680,000 in new electric vehicles, and 670,000 in industrial energy efficiency. “With $1 trillion of investment over each of the next three years, global energy-related CO2 emissions could end up falling in 2023 by 4.5 billion tonnes, or 14% of last year’s total,” Bloomberg Green reports, citing the IEA release.
But so far, the indications from global recovery spending are not good, The Guardian notes. Governments have directed $33 billion to airlines and lavished $509 billion on high-carbon industries with few or no green strings attached. “Only about $12.3 billion of the spending announced by late last month was set to go towards low-carbon industries, and a further $18.5 billion into high-carbon industries provided they achieve climate targets.”
Birol said the failure to emphasize low-carbon investments was understandable during the first phase of the pandemic, when governments were just reacting to a sudden and unexpected crisis. But by late May, they were still funding high-carbon projects, including an uptick in coal-fired power plants in Asia.
In the more hopeful, green investment scenario, “the $1 trillion in annual investment required in the IEA’s estimates would come from public and private sources, and is equivalent to about 0.7% of global GDP,” Bloomberg writes. “About 30% of that would come from governments, which amounts to less than 10% of the funds committed to coronavirus economic relief, according to the IEA. And it would come on top of already planned investments in clean energy.”
Rosie Rogers, head of green recovery at Greenpeace UK, said countries could boost their economies by taking the IEA’s advice. “Government putting money behind sustainable solutions really is an economic no-brainer,” she told The Guardian. “It can see us build a recovery that both tackles the climate emergency and improves people’s lives through cleaner air and lower bills.”
Stephanie Pfeifer, CEO of the Institutional Investor Group on Climate Change, added that financiers are keen to get onboard. “The IEA has shown [a green recovery] is not only desirable, but economically astute,” she said. “Investors are fully committed to playing their part in this process.”
But University of Oxford climate researcher said the approach won’t work everywhere without a renewed international commitment to climate finance. “The IEA assumes very high levels of public and private spending in developing countries,” he told Bloomberg. “Their numbers are completely unrealistic without significant external support.”
