According to IEA and IMF’s analysis, the plan could boost global economic growth by 1.1 percentage points each year over the next three years, and save or create 9 million jobs globally
The International Energy Agency (IEA) unveiled on Thursday a sustainable recovery plan for the global post-coronavirus economy over the next three years, which will require total investments of US$3 trillion.
The global pandemic has created the worst shock to economies since the 1930s and has decimated planned investments in all sectors, including energy. This year, global energy investments are expected to drop by an “unparalleled” 20 percent, the IEA said.
The IEA, in cooperation with the International Monetary Fund (IMF), has drafted the Sustainable Recovery Plan for actions in the energy sector that governments can take between 2021 and 2023. The plan addresses policies in six sectors – electricity, transport, industry, buildings, fuels, and emerging low-carbon technologies. The three main goals of the green recovery plan are boosting economic growth, creating millions of jobs, and putting emissions into structural decline.
According to IEA and IMF’s analysis, the plan could boost global economic growth by 1.1 percentage points each year over the next three years, and save or create 9 million jobs globally, especially in retrofitting buildings and other measures to improve their energy efficiency, and in the electricity sector, particularly in grids and renewables. The plan could also lower annual energy-related greenhouse gas emissions by 4.5 billion tons in 2023 than they would be otherwise. Related: BP Issues $12 Billion In Hybrid Bonds
In order to achieve its goals, the plan would need a global investment of around US$1 trillion annually over the next three years. This would be equal to 0.7 percent of global GDP.
“Governments have a once-in-a-lifetime 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,” Dr. Fatih Birol, IEA Executive Director, said in a statement.
“Our Sustainable Recovery Plan provides them with rigorous analysis and clear advice on how to tackle today’s major economic, energy and climate challenges at the same time. The plan is not intended to tell governments what they must do. It seeks to show them what they can do,” Birol noted.
By Tsvetana Paraskova for Oilprice.com
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The notion of imminent energy transition from oil and natural gas to renewables is an illusion. That remains so despite being challenged by serious environmental policies and despite a global expenditure of $ 3.0 trillion on renewable energy during the last decade. This is a hefty price to pay just to gain only a percentage point of market share from coal.
Moreover, spending $3 trillion over the next three years to boost economic growth by a mere 1.1% per annum is too heavy a price to pay for such a meagre economic growth. Once the pandemic is over, the global economy could achieve three to four times that growth on its own volition. Furthermore, once the global economy is out of the lockdown, it will automatically restore most of the jobs that have been lost.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London