A Green Recovery from the COVID-19 Crisis
The COVID-19 crisis has already had a profound impact upon the energy industry. While it is too early to confidently predict the long term consequences, it is hoped that the uptake of renewables will intensify as a result of the crisis. A recent report published by The International Renewable Energy Agency (IRENA) claims that accelerating investment in renewable energy could generate huge economic benefits while tackling the global climate emergency.
The IRENA’s report which was published in April claims that investment in renewables could produce GDP gains of almost £80tn between now and 2050. The report also outlines the various investments and technologies which will be essential for governments to meet their Paris Agreement obligations. Proposed recovery measures include flexible power grids, electric vehicle charging, interconnected hydropower and green hydrogen.
Energy-related CO2 emissions have risen by an average of 1% per year since 2010. It is likely that the crisis will reduce emissions in the short term as a result of the drop in transport use, electricity demand and industrial activity. Experts are currently predicting an 8% drop this year, some 2,600MtCO2. Of course, this will quickly rebound, unless governments collectively agree to align climate change targets with socio-economic policies. The agency’s report found that by replacing fossil fuels, renewables could cut the energy industry’s CO2 emissions by 70% by 2050. Investment in renewable energy would also increase jobs in the sector to 42 million by 2050, four times the current number.
In a recent letter to the Prime Minister, the Committee on Climate Change outlined its advice as to how effective climate change policy should play a part in the UK’s recovery from the COVID-19 crisis. The committee sets out six principles for recovery. These are:
1. Use climate investments to support the economic recovery and jobs. Government could accelerate climate investments, either without direct public funding or by co-financing to stimulate private investment.
2. Lead a shift towards positive long term behaviours. Utilise the opportunity to embed new social norms, especially for travel, to improve productivity and reduce emissions.
3. Tackle the wider ‘resilience deficit’ on climate change. The crisis has highlighted the importance of implementing measures to tackle the key risks facing the UK. Comprehensive plans to reduce emissions are not yet in place and collective cross-border policies are essential to ensure net-zero.
4. Embed fairness as a core principle. The crisis has exacerbated existing inequalities and threatens jobs in many sectors. It is important that the lost or threatened jobs of today should be replaced those created by the new, resilient economy.
5. Ensure the recovery does not ‘lock-in’ greenhouse gas emissions or increased climate risk. Support for carbon-intensive sectors should be given on the basis of them taking lasting action on climate change.
6. Strengthen incentives to reduce emissions when considering fiscal changes. Many sectors of the UK economy do not bear the full costs of emitting greenhouse gases. Revenue could be raised by setting or raising carbon prices for these sectors.
As the Government battles to bring the crisis under control, it is more important than ever for climate change policy to be at the forefront of any recovery package. The current situation offers a unique window of opportunity to secure a resilient long term economic and social recovery whilst ensuring that net-zero emissions targets are met. It remains to be seen whether the UK will embrace the opportunity for a modern, clean, healthy energy system or revert to old habits.
For any queries on green energy, get in touch with our energy team.
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