Only about 2% of global government green recovery spending is allocated to clean energy measures, according to new analysis from the International Energy Agency.
The IEA has released a Sustainable Recovery Tracker to help policymakers assess how far recovery plans are moving the needle on climate.
The new online tool monitors the sums of money, both public and private, being mobilised worldwide by recovery plans. According to the IEA, even though these fiscal packages are significant, they fall well short of what is needed to reach international climate goals.
“Since the Covid-19 crisis erupted, many governments may have talked about the importance of building back better for a cleaner future, but many of them are yet to put their money where their mouth is. Despite increased climate ambitions, the amount of economic recovery funds being spent on clean energy is just a small sliver of the total,” said Fatih Birol, the IEA Executive Director.
Under governments’ current recovery spending plans, global carbon dioxide (CO2) emissions are set to climb to record levels in 2023 and continue rising in the following years. This would leave the world far from the pathway to net-zero emissions by 2050.
The Tracker considers over 800 national sustainable recovery policies in its analysis and highlights the following:
- Governments have mobilised $16 trillion in fiscal support throughout the Covid-19 pandemic, with most of it focused on emergency financial relief for households and firms.
- Only 2% of total fiscal support is earmarked for clean energy transitions.
- All the key sectors highlighted in the IEA Sustainable Recovery Plan are receiving inadequate attention from policy makers.
- Current government plans would only increase total public and private spending on clean energy to around $350 billion a year by 2023 – only 35% of what is envisaged in the Plan.
- Fiscal shortfalls are particularly pronounced in emerging and developing economies.
- Stark geographic disparities are emerging in clean energy investment. The majority of funds are being mobilised in advanced economies, which are nearing 60% of the investment levels envisaged in the Sustainable Recovery Plan. Emerging and developing economies, many of which have limited fiscal leeway, have so far mobilised only about 20% of the recommended spending levels.
Dr Birol said: “Not only is clean energy investment still far from what’s needed to put the world on a path to reaching net-zero emissions by mid-century, it’s not even enough to prevent global emissions from surging to a new record.
“Many countries – especially those where the needs are greatest – are also missing the benefits that well planned clean energy investment brings, such as stronger economic growth, new jobs and the development of the energy industries of the future.”
View the IEA’s Sustainability Tracker online.