The energy sector, as a key enabler of modern life, is critical for global and national responses to the unprecedented health and economic crisis from the coronavirus pandemic. The immediate priority is managing the health crisis, but governments are also focused on economic recovery. Ensuring that clean energy represents an important component of government stimulus plans is an excellent opportunity to foster fast economy recovery while building a secure and sustainable energy future.
Energy efficiency and renewable energy actions can support the goals of economic stimulus programmes by supporting existing workforces and creating new jobs, boosting economic activity in key labour-intensive sectors, and delivering longer term benefits to competitiveness, improved energy affordability, lower bills, while reducing greenhouse gas emissions and air pollution and creating a more resilient energy system.
Experience has proven the effectiveness of including energy efficiency in stimulus programmes. Energy efficiency is the first fuel clean energy transitions, improves competitiveness, alleviates fuel poverty, reduces reliance on energy imports, and delivers more jobs than other sectors. Stimulus investment in efficiency can support job-intensive activity in key sectors such as construction and manufacturing, in technology replacement, as well as in infrastructure projects.
Governments can help maintain progress in renewables. Rapidly falling costs and strong policy support have made renewables increasingly attractive and competitive in many economies. However, the current covid-19 crisis could derail their momentum, due to supply chain disruptions and lower investment due to shrinking public and private budgets. When designing stimulus packages, governments should bear in mind the structural benefits that renewables can bring in terms of economic development and job creation while also reducing emissions and fostering technology innovation.
The IEA analysis shows that governments directly or indirectly drive more than 70% of global energy investments. This is the reason why policy-makers can use the current situation to step up their clean energy ambitions and steer energy-related investments onto a more sustainable path.
- An opportunity for energy ministers to discuss the current situation, re-affirm political commitment towards clean energy transitions and share best policies and practices
- A kick-off discussion among energy ministers on how to design economic stimulus plans to boost growth and jobs through public and private investments in energy efficiency and renewable energy.
- To discuss next steps and what role the IEA could play to support governments in the development of economic recovery packages.