Clean energy spending accounts for only 4% of global economic stimulus packages
ISTANBUL – Clean energy spending accounts for only 4% or $710 billion of the total $18.2 trillion mobilized to rebuild economies after Covid crisis, according to the latest update of the International Energy Agency’s (IEA) Sustainable Recovery Tracker.
Although green spending globally has shown an increase of 50% over the past five months, the IEA said the gap between advanced and developing economies is troubling.
The IEA Sustainable Recovery Plan developed in 2020 in collaboration with the International Monetary Fund (IMF), estimated that if governments mobilize $1 trillion in clean energy investments each year between 2021 and 2023, they would boost the global economy, create millions of jobs and put emissions onto a Paris-compliant trajectory that would also be aligned with the Net Zero Emissions Scenario.
Advanced economies account for over $370 billion of expenditure to be used before the end of 2023, equivalent to a level of short-term government spending that would help keep the door open for the IEA’s global pathway to net zero emissions by 2050.
Across emerging and developing economies, however, the total amount of financial resources that are dedicated to sustainable recovery measures is one-tenth of the amount in advanced economies, reflecting their very different financial and economic circumstances, the IEA said.
Around $52 billion of sustainable recovery spending is planned by the end of 2023 in emerging and developing economies, which the IEA said is well short of what is needed in a pathway towards net zero emissions by 2050.
The IEA said the gap is unlikely to narrow in the near term as governments with already limited fiscal means now face the challenge of maintaining food and fuel affordability for their citizens amid the surge in commodity prices following Russia’s invasion of Ukraine.
International cooperation will be essential to change these clean energy investment trends, especially in emerging and developing economies where the need is greatest.
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