Only 3% of the $16.9 trillion that governments have so far mobilized to bolster their economies from the recession triggered by the COVID-19 pandemic is going to clean energy, according to the latest update by the International Energy Agency (IEA) Thursday.
Global carbon dioxide (CO2) emissions are on an upward trajectory, with this year set to be the second-largest annual increase in history, the IEA said.
This comes at a time when the world is in the midst of an "uneven and unsustainable economic recovery" and despite the increase in economic recovery spending for clean energy investment in the past three months.
In July when the IEA introduced the Sustainable Recovery Tracker to assess how government recovery measures to date compared with the Sustainable Recovery Plan published by the agency last year, the share of clean energy spending in recovery plans was just 2% but reached 3% at the end of October.
The IEA's Sustainable Recovery Plan recommended $1 trillion of annual spending on clean energy measures worldwide over a three-year period that could put the world on track with international climate goals while boosting global economic growth and employment.
The agency found that clean energy spending is highly imbalanced geographically with most of it taking place in advanced economies rather than the developing world. It also revealed that the expenditure still falls short of what is needed to put global CO2 emissions into a sustained decline.
"We are witnessing an uneven and unsustainable recovery from last year’s economic crisis - a recovery that consists of huge growth in fossil fuel consumption while leaving behind nearly 80% of the world’s population in the shift towards a new and cleaner energy economy," said Fatih Birol, the IEA executive director.
"On the eve of the G20 Leaders’ Summit and the COP26 Climate Change Conference, governments of major economies need to show they are ready to drive a massive scaling up of investments in clean energy globally and steer the world onto a safer path. Failure to put their money where their mouth is could well mean failure to keep the door open to limiting global warming to 1.5 °C," Birol warned.
Emerging economies being left behind
Over the past three months, 40 new funding announcements have been made and 140 previously announced spending programs have added new details or spending, the IEA said.
These expand on the 800 spending policies previously covered in the IEA's Tracker.
In total, governments have now earmarked an estimated $470 billion for clean energy investment between now and 2030, representing an increase of $90 billion, or 20%, from the level seen in July.
According to the analysis, advanced economies are moving strongly towards recoveries by the global total amounts to only around 4% of the level called for under the IEA Sustainable Recovery Plan.
France, Japan, the UK, and US are in the process of crafting and approving new investment programs. However, emerging economies, where the majority of clean energy investments need to occur in the next decade, are being left, the IEA said.
Across emerging and developing economies as a whole, spending on clean energy measures is projected to be only around 20% of the level recommended in the Sustainable Recovery Plan, with little new spending in the pipeline due to tightening fiscal constraints as a result of the pandemic, the Tracker showed.
"The shortfall in sustainable recovery spending in emerging and developing economies is a global problem that requires a global solution,” Birol said.
"These countries do not have the luxury of cheap financing that many advanced economies enjoy. The world urgently needs to come up with bold measures to mobilize and channel clean energy investment to emerging and developing economies on a major scale. This is where it is needed most and has the biggest bang for its buck in tackling emissions," he underlined.