The International Energy Agency is today presenting a Sustainable Recovery Plan. The plan is 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 Special Report on Sustainable Recovery from the IEA’s flagship World Energy Outlook series, the plan offers an energy sector roadmap for governments. 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.
In an analysis carried out in cooperation with the International Monetary Fund, the report shows that the set of policy actions and targeted investments over the 2021-2023 period that are outlined in the Sustainable Recovery Plan can achieve a range of significant outcomes, notably:
- boost global economic growth by an average of 1.1 percentage points a year
- save or create roughly 9 million jobs a year
- reduce annual global energy-related greenhouse gas emissions by a total of 4.5 billion tonnes by the end of the plan
In addition, the plan would deliver other improvements to human health and well-being, including driving a 5 percent reduction in air pollution emissions, bringing access to clean-cooking solutions to around 420 million people in low-income countries, and enabling nearly 270 million people to gain access to electricity.
Achieving these results would require global investment of about USD 1 trillion annually over the next three years. This sum represents about 0.7 percent of today’s global GDP and includes both public spending and private finance that would be mobilised by government policies.
Six key sectors
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 IEA’s new energy employment database shows that in 2019, the energy industry – including electricity, oil, gas, coal and biofuels – directly employed around 40 million people globally. The special report estimates that 3 million of those jobs have been lost or are at risk due to the impacts of the Covid-19 crisis, with another 3 million jobs lost or at risk in related areas such as vehicles, buildings and industry.
Recent IEA analysis has shown that global energy investment is set for an unprecedented plunge of 20 percent 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. It will lower the risk of outages, boost flexibility, reduce losses and helps 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 percent 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.
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.