Governments can turn energy investments on more sustainable path amid COVID-19 response, IEA says

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GOVERNMENTS have a historic opportunity today to steer global energy investments to a more sustainable path, the executive director of IEA has said.

According to Dr Fatih Birol, despite the coronavirus pandemic turning into an unprecedented crisis, we must not lose our sight from clean energy transitions.

In a recent blog post, Dr Birol stated: “The coronavirus is turning into an unprecedented international crisis, with serious repercussions for people’s health and economic activity.

“Although they may be severe, the effects are likely to be temporary.

“Meanwhile, the threat posed by climate change, which requires us to reduce global emissions significantly this decade, will remain.

“We should not allow today’s crisis to compromise our efforts to tackle the world’s inescapable challenge.”

Governments are drawing up stimulus plans in an effort to counter the economic damage from the coronavirus.

According to Dr Birol, these stimulus packages offer an excellent opportunity to ensure that building a secure and sustainable energy future doesn’t get lost amid the flurry of immediate priorities.

He goes on to suggest that large-scale investments on clean energy technologies, such as solar, wind and hydrogen, should be at the heart of the government plans to encounter the impact of the coronavirus they bring in the benefits of stimulating economy and speeding up clean energy transition.

Dr Birol continued: “Governments can make clean energy even more attractive to private investors by providing guarantees and contracts to reduce financial risks.

“Taking these steps is extremely important because the combination of the coronavirus and volatile market conditions will distract the attention of policy makers, business leaders and investors away from clean energy transitions.”

He sees the situation as a test of governments and companies’ commitment to clean energy as it will be quickly noticeable if their emphasis on clean energy transitions fades when market conditions become more challenging.

“The coronavirus brings other dangers for clean energy transitions.

“China, the country most heavily affected by the virus initially, is the main global production source of many clean energy technologies, such as solar panels, wind turbines and batteries for electric cars.

“The Chinese economy was severely disrupted during the government’s efforts to contain the virus, especially in February, causing potential supply chain bottlenecks for some technologies and components.

“This is why governments need to make sure they keep clean energy transitions front of mind as they respond to this fast-evolving crisis.”

IEA analysis shows that governments directly or indirectly drive more than 70% of global energy investments and according to Dr Birol, they must use this opportunity to drive lasting change in terms of sustainable technology.

Dr Birol concluded: “Governments can use the current situation to step up their climate ambitions and launch sustainable stimulus packages focused on clean energy technologies.

“The coronavirus crisis is already doing significant damage around the world.

“Rather than compounding the tragedy by allowing it to hinder clean energy transitions, we need to seize the opportunity to help accelerate them.”