Now is the time to plan the economic recovery the world needs

Alongside Danish Climate and Energy Minister Dan Jørgensen, I co-chaired a high-level roundtable discussion on Friday involving government ministers and other leaders from around the world to review the crucial question of how best to create jobs and spur economic growth through investments in clean energy technologies.

At the event, whose participants included Amina Mohammed, Deputy Secretary-General of the United Nations, and Frans Timmermans, Executive Vice-President of the European Commission, ministers around the world shared their experiences on how their governments are responding to the impacts of the Covid‑19 pandemic. They emphasised that their current priority is addressing the critical public health challenges while minimising the immediate economic and financial damage. 

The ministers made it clear that despite the difficulties of today’s crisis, they remain committed to supporting key areas of clean energy – such as energy efficiency, wind, solar, batteries, hydrogen and CCUS as they draw up plans to revive their economies after the worst of the pandemic has passed. 

The governments taking part in the meeting – Australia, Canada, Denmark, the European Commission, Finland, France, Germany, Italy, India, Indonesia, the Netherlands, New Zealand, Sweden, Switzerland and the United Kingdom – were in large part those involved in the IEA’s Clean Energy Transitions Programme, which aims to speed up the development of clean energy in developing economies. The focus of the event was on the positive effects of including clean energy investments and policies in national economic stimulus plans and efforts to return people to work.

The impressive and diverse group of decision-makers – which also included heads of international organisations and prominent business leaders – were united by deep concerns about the rising numbers of people left jobless by this extraordinarily ferocious economic crisis. They called for making investments in clean energy a key part of Covid-19 response and recovery plans.

To be frank, the challenges in front of policy makers are unlike those created by any other recent crisis. We are still in the process of developing a clear picture of its immediate effects, let along the long-term consequences. What we do know at this point is that as soon as public health experts agree it is safe to start easing confinement measures, those people who have lost their jobs as a result of this crisis will urgently need support finding new ones. We also know that with many companies hanging on by their fingernails, governments will be critical for leading economic recoveries.

As they design once-in-a-generation stimulus plans, policy makers are set to make hugely consequential decisions that are likely to shape our energy future for many years to come. Even before this crisis erupted, IEA analysis showed that governments directly and indirectly drive more than 70% of global energy investments.

IEA data and analysis show that investing technologies like energy efficiency and renewables brings benefits on multiple levels: it makes energy systems more modern, more resilient and cleaner, stimulates much needed job creation in the short term, and also enhances future economic competitiveness and productivity.

Participants in Friday’s roundtable identified energy efficiency, renewables and other dynamic clean energy technologies such as battery storage and hydrogen as key areas for action. By including them in economic recovery packages, they have opportunities to support existing workforces, create new jobs and drive reductions in emissions.

The pandemic has made it clearer than ever that reliable energy supplies are indispensable for modern societies to remain resilient in the face of crisis. What is also indispensable is quickly putting greenhouse gas emissions into structural decline in order to steer the world towards meeting international climate goals. 

Let me be clear, economic growth coupled with decarbonisation is not only realistic, it has already been happening. Last month, IEA data showed that global energy-related carbon emissions stopped growing in 2019 even as the world economy expanded by nearly 3%. A key part of this encouraging development was the decline in emissions from the electricity sector across advanced economies, indicating that clean energy transitions are moving forwards.

On Thursday, the IEA will release the Global Energy Review 2020, providing initial estimates for emissions trends this year. I’m not giving away any surprises by telling you now that it will show a drop in emissions. But this Covid-19-induced decline that coincides with huge numbers of premature deaths and widespread hardship is nothing to celebrate. Countries need comprehensive and economically beneficial strategies for decarbonising their economies.

We must heed the lessons of the past. Emissions after the 2008 global financial crisis, they soon rebounded sharply again. We must learn from that experience. This is why governments should make sure clean energy transitions are front of mind as they respond to the fast-evolving Covid-19 crisis.

Policy makers can rely on the IEA to identify the best approaches for emerging on a productive, secure and sustainable trajectory. We are providing up-to-date data and rigorous analysis on the effects of the crisis, and recommendations across all fronts to enable governments and industry to make smart decisions.

Friday’s roundtable discussion marked the first of a series of key IEA-backed events in this vein. In these extraordinarily challenging times, my hope is that governments will chart a course towards a better future for their citizens. The world cannot afford anything less. It is crucial to avoid repeating the mistakes of the past.

Look out for our World Energy Outlook special report in June that will quantify how clean energy policies and investments can create jobs, support economic recoveries and achieve emissions reductions. The report’s findings and recommendations will inform the high-level discussions at the IEA Clean Energy Transitions Summit on 9 July, which will bring together an even larger group of top energy decision-makers than the one we assembled Friday in an effort to drive real-world action for a more resilient and cleaner global energy system.

Unprecedented challenges call for unprecedented responses. This is a time to be ambitious and innovative. The IEA is ready to support all such efforts.