Run-up to COP26: Emissions to rise as focus shifts to recovery, says IEA

Says India's Gati Shakti plan could spur clean energy investment; no other country has any new spending plans

The International Energy Agency (IEA) in its latest “sustainable recovery tracker” has observed that carbon emissions are set to rebound as countries focus on economic recovery following the Covid pandemic.

The IEA noted that global energy-related CO2 emissions are on track for the second largest single-year rebound in history in absolute terms, erasing most of the pandemic-related reduction from 2020.

“This 2021 reb­ound has be­en driven by increased electricity consumption, particularly in Asia, where coal power generation is prevalent. Infra­st­ructure spen­ding has featured in many recovery plans, particularly in emerging market and developing economies, and the demand for material inputs has contributed to rising emissions,” the report said.

It said several countries, notably the G7, have made more funding available to clean energy economy, but developing nations have fallen behind. IEA said the gap in sustainable recovery spending between advanced economies and emerging market and developing economies is still prevalent, with the former mobilising “nearly nine times the funding for clean energy through recovery measures than the latter”.

According to the IEA’s calculations, at the end of October 2021, national governments globally earmarked $470 billion to clean energy measures as part of their economic response to the Covid-19 crisis, an increase of 20 per cent compared with the end of July. This corresponds to about 3 per cent of the total fiscal support unleashed in response to Covid-19 worldwide.

According to IEA’s estimates, government spending rose substantially in energy efficiency, clean fuels and innovation funding, as well as in low-carbon and efficient transport, adding to already strong levels of government support for these areas.

It, however, said this spending has the potential to mobilise an additional $400 billion a year in public and private clean energy and sustainable recovery measure investment over the 2021-2023 period. This increase would be 40 per cent of the levels envisioned by the IEA Sustainable Recovery Plan over the same period — up from 35 per cent in July.

The Sustainable Recovery Plan launched by the IEA in 2020 estimated that if governments mobilised $1 trillion in clean energy investments each year from 2021-2023, it would boost global economic growth on an average by 1.1 percentage point a year. IEA believes a full and timely implementation of the plan would save or create roughly 9 million jobs and put the world on track to meet its goals outlined in the Paris Agreement.

The IEA tracker report holds more significance with the global climate conference COP26 barely a few days away, where countries will announce their investment in climate change mitigation, clean energy and sustainable development.  

IEA noted that several countries are in the process of crafting and approving new spending programmes that would include substantial clean energy provisions. “These under-deliberation spending packages — notably in France, India, Japan and the United States — could see significant portions earmarked for clean energy,” it said.

The IEA noted that apart from India, no other country among emerging and developing economies seems to have any new spending plans with clean energy provisions. It said international catalysts like development assistance could be key to increasing clean energy investment levels this decade in emerging and developing economies.

The IEA estimates that about $4 trillion in clean energy investments needs to be materialised every year by 2030, with up to two-thirds to be invested in the emerging markets developing economies (EMDEs).