Report urges $4.5tn Covid-19 investment in renewable energy
Investing in renewable energy as part of the Covid-19 recovery will bring huge benefits says a new report by the International Renewable Energy Agency (IRENA).
The Post-COVID recovery: An agenda for resilience, development and equality outlines immediate stimulus action for the next three years (2021-2023) as well as measures for a mid-term 2030 recovery perspective over the next decade.
Scaling-up public and private energy spending to $4.5tn a year from the current $1tn would boost the world economy by an additional 1.3% and create 19 million additional energy transition-related jobs by 2030. Jobs in renewables alone could triple to 30 million by 2030. Every million dollars invested in renewables would create three times more jobs than in fossil fuels.
“Renewables have proven to be the most resilient energy sources throughout the current crisis”, said Francesco La Camera, Director-General of IRENA. “This evidence should allow governments to take immediate investment decisions and policy responses to overcome the crisis. With today’s recovery plan for governments, IRENA uses its global mandate on energy transitions to inform decision-making at this critical time, while staying on course toward a fully decarbonised system by 2050.”
Doubling annual public sector transition investments to $2tn over the next three years as part of Covid-19 recovery plans will provide an effective stimulus and can unlick private sector investments of a factor of three to four. This has to include reforming fossil fuel prices, retiring fossil fuel assets, driving green financing and bailouts, and strategically investing in energy transition says the report.
That $2tn investment would boost GDP by 1% and create additional 5.5 million transition-related jobs in three years. However labour and industrial policies are required to leverage local capacities and skills and create industries and jobs across the value chain.
Any recovery strategy should include innovative solutions and emerging technologies such as green hydrogen with the potential to eventually deliver a net zero energy system. This is alongside the renewable-based power generation that would become the backbone of future energy markets, supported by transition-related industries like battery storage, says the report.
Renewable-based transport can expand with incentives for electric vehicles and continued infrastructure investment including smart grids and EV charging stations.
“Now is the time to invest in a better future”, said La Camera. “Government policies and investment choices can create the necessary momentum to enact systemic change and deliver the energy transformation away from fossil fuels. Driving a structural shift towards cleaner energy systems and more resilient economies and societies is more urgent than ever. Most of all, this is a global agenda, and we must leave no one behind.”
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