Political and financial leaders have “a historic opportunity” to usher in a new era for global climate action with economic stimulus packages to confront the coronavirus pandemic, the top of the International Energy Agency (IEA) has said.
In an interview with Climate Home News on Tuesday, Fatih Birol said stimulus packages to support economic recovery marked a vital moment for governments to “shape policies” in line with climate action.
“I am speaking with several governments and international banking institutions leaders since they're all busy designing stimulus programmes for that economy – the plans they will put together will be vitally important,” he said.
“This is the reason I'm telling them that we can use the current situation to step-up our ambition to tackle climate change.”
Birol said he'd urged political and global financial leaders to create “sustainable stimulus packages” that concentrate on purchasing clean energy technologies and accelerate the transition away from fossil fuels.
“This is really a historic chance of the planet to, similarly, create packages to recuperate the economy, but on the other hand, to reduce dirty investments and accelerate the energy transition,” he said.
The health crisis has hammered the economy in the week because the World Health Organisation declared coronavirus a pandemic. Stock markets have experienced some of their toughest times of trading, sparking fears of a global economic recession.
The aviation industry originates under particularly strains in recent weeks, having a number of airlines announcing an impressive scale-back of their operations and executives with government bailouts to prevent bankruptcy.
“The global economy goes through very hard times and also the energy sector is disproportionately affected,” said Birol. “Aviation represents 1% of the global economy but it's 8% of worldwide oil consumption.”
“I understand that after i speak with governments, they are greatly preoccupied with the current economic turmoil but we should keep your eye on the ball that's addressing climate change,” he explained.
Birol was speaking before reports in US media that President Mr . trump would be seeking an $850 billion stimulus bundle, including $50 billion for airlines.
Last year, a study by UN Environment found the world required to cut emissions by 7.6% per year until 2030 to limit climatic change to 1.5C by the end of a lifetime – the tougher temperature goal countries dedicated to underneath the Paris Agreement.
In most recent years, global emissions have increased however they stagnated in 2023, based on an IEA analysis.
Birol insisted 2023 could mark a definite peak in emissions, as long as governments seized interventions to recover from the impacts from the coronavirus as the moment to gear the economy towards a green transition.
“It may be the situation that we'll see 2023 emissions decline. In my view, this is not a reason to celebrate because emissions reduction should be the result of right energy policies,” he explained.
In an argument last week, Birol wrote that such policies could include large-scale investments in clean energy technologies such as solar, wind, hydrogen and carbon capture and storage technologies.
The massive investment plan outlined by Birol echoed proposals such as the EU Commission’s “green deal for Europe” targeted at accelerating the shift of capital towards the green economy while creating climate-proof jobs.
The IEA has previously come under criticism for underplaying the speed of renewable energy deployment and for not considering the Paris Agreement's more ambitious target of just one.5C in its influential World Energy Outlook scenarios.
Birol also advocated for countries to capitalise on low interest to boost innovation on hydrogen and carbon capture and storage technology, and use the chance of steep reductions in oil prices to chop fossil fuel consumption subsidies.
The IEA estimates annual fossil fuel consumption subsidies are worth $400 billion worldwide, 40% which are used to make oil products cheaper.
Birol expressed optimism governments could bend the emissions growth curve this season because of a number of favourable factors.
An IEA analysis discovered that 70% of worldwide energy investments is driven by governments directly or indirectly like a response to policy. Meanwhile, the reduced price of clean energy strengthens the economical case for that clean energy transition they are driving stimulus packages.
“This is a big opportunity we can't miss,” he said. “Here the problem is not just the amount of money [dedicated to stimulate the economy] however the direction from the money,” he explained.
