Failure to act now risks a repeat of the aftermath the 2008 global financial crisis, when governments did not prioritize stimulus spending on climate, allowing CO2 emissions to bounce back with what the IEA describes as the largest increase ever recorded.
The plan would also help the global economy bounce back from its worst downturn since the 1930s. According to the IEA, directing stimulus money to fighting the climate crisis would save or create 9 million jobs and boost global economic output by 1.1 percentage points each year. Hundreds of millions of people would gain access to electricity and clean cooking solutions for the first time.
Fatih Birol, executive director of the Paris-based agency, said in a statement that a steep decline in the cost of clean energy technology means governments have the rare opportunity to “reboot their economies and bring a wave of new employment opportunities while accelerating the shift to a more resilient and cleaner energy future.”
Here’s where the plan recommends governments invest across six key industries:
- Expand and modernize grids
- Accelerate the growth of wind and solar
- Maintain the role of hydro and nuclear power
- New clean-energy vehicles
- Expand high-speed rail networks
- Improve urban infrastructure
- Retrofit existing buildings and more efficient new constructions
- More efficient and connected household appliances
- Improve access to clean cooking
- Improve energy efficiency and increase electrification
- Expand waste and material recycling
- Reduce methane emissions from oil and gas operations
- Reform fossil fuel subsidies
- Support and expand the use of biofuels
- Hydrogen technologies
- Small modular nuclear reactors
- Carbon capture, utilization and storage
Governments have responded to the coronavirus pandemic by unleashing $9 trillion in stimulus money. But climate projects have so far taken a back seat to programs that subsidize wages and support companies that are in distress.
According to the IEA, some countries have delayed decisions on clean energy. Renewable energy auctions have been postponed in countries including Chile, China, Germany, Ireland and Portugal, for example.
The IEA is urging more action ahead of a summit of the biggest energy consuming nations, corporate executives and investors next month. “The plan is not intended to tell governments what they must do. It seeks to show them what they can do,” Birol said in his statement.