* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Clean and resilient energy provides a safe and strategic investment choice as $8 trillion is spent on virus stimulus packages
Patricia Espinosa is executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC). Francesco La Camera is director-general of the International Renewable Energy Agency (IRENA).
COVID-19 is a global health crisis unlike any in recent history — one that is spreading human suffering, destabilizing the global economy and upending the lives of billions of people around the globe.
While COVID-19 is the most urgent threat facing humanity today, we cannot forget that climate change is the biggest threat facing humanity over the long term. 2019 marked the second-hottest year on record, capping off a five-year period that ranks as the warmest span in recorded history.
The consequences are real: hurricanes, wildfires and floods cost the world $150 billion in 2019 alone. Insurance companies indicated that losses for business and the economy - before Covid-19 hit - were already expected to increase because of a decade-long rise in natural catastrophes with direct links to climate change.
As UN Secretary-General Antonio Guterres recently stated, now is not the time for retreat.
The response to the two crises, however, may be mutually reinforcing: global recovery from COVID-19 can put the world on the path for a safe, healthy, just and sustainable future.
The Paris Agreement on Climate Change and 2030 Agenda for Sustainable Development provide a clear international framework for action and embrace our shared responsibility for peoples of the world and the planet. They provide a vision for the world that is inclusive, resilient and sustainable, leaving nobody behind.
We are also reminded that 2020 is the year revised Nationally Determined Contributions (NDCs) to climate action are due under the Paris Agreement. The timing is right to accelerate the clean transition and incorporate recovery and sustainable development plans in those formal updates.
Rapid decarbonisation calls for unprecedented policy initiatives and investments. Clear long-term objectives, combined with targeted public investment and appropriate market incentives, will enable the private sector to act swiftly and confidently.
To date, governments around the world have announced $8 trillion in economic packages. This number is bound to grow in the coming months and years. There are many ways in which these packages can support the vision outlined in the international agreements, from infrastructure, to social programs and policies, and more.
IRENA’s Global Renewables Outlook, released a few days ago, shows how we can build more sustainable, equitable and resilient economies and societies.
Renewables-based energy transformation calls for investment in infrastructure that enables the scaling up of renewables and efficiency. This includes flexible power grids, energy storage, green hydrogen, and many other clean energy technologies and enabling infrastructure.
The Outlook shows that it is also possible to decarbonize difficult sectors such as aviation, freight and heavy industry as innovative solutions continue to develop. Investment in the energy system fit for the 21st century would not just decarbonise, but also push energy sector jobs to 100 million globally by 2050. It would increase global GDP by 2.4%, which amounts to a cumulative gain of $98 trillion to 2050.
The economic fallout from the pandemic is far-reaching, with an adverse impact on many sectors including renewables. For many reasons, however, the impact on the renewables sector may be different than in other parts of the economy, not least because energy transitions bring a range of solutions at this difficult moment.
Many renewable technologies can be ramped up relatively quickly, helping to revive industries and create new jobs. The latest oil price developments and the heightened unpredictability of returns on hydrocarbon investments make the business case for renewables even stronger.
We should not get distracted. The moment has come to reduce or redirect fossil-fuel subsidies towards clean energy without added disruption.
We are at a crossroads, but the choices are clear. Clean, flexible and resilient energy systems provide a safe and strategic investment choice in a time of uncertainty and provide climate-friendly solutions that are urgently needed throughout the world.
Now, more than ever, public policies and investment decisions must align with long-term objectives to support resilient and sustainable economies and societies. By addressing the health and climate crises together and applying a holistic, economy-wide perspective, the world will not only “recover better” but also become healthier, cleaner, and more prosperous - for all people.