The International Energy Agency (IEA), in its Global Energy Review 2020, has predicted that global CO2 emissions will decline by 8% in 2020, or almost 2.6 gigatonnes (Gt), to levels of 10 years ago. Such a year-on-year reduction would probably be the largest ever.
By Rupali Handa
COVID-19 impact: There is growing debate on the current and potential impacts of COVID-19 on economy, industry, employment, environment and what not. Beyond the immediate impact on health, this pandemic has major implications for global economies, energy use and CO2 emissions. The International Energy Agency (IEA), in its Global Energy Review 2020, has predicted that global CO2 emissions will decline by 8% in 2020, or almost 2.6 gigatonnes (Gt), to levels of 10 years ago. Such a year-on-year reduction would probably be the largest ever. In fact, this would be six times larger than the previous record reduction of 0.4 Gt in 2009 – caused by the global financial crisis.
Surprisingly, the virus did something that all the governments collectively could not achieve through years of multilateral talks and conventions. This seems like a temporary reprieve for the climate. However, before jumping to any conclusion, let us not overlook the underlying reason behind this projected decline in emissions. IEA has predicted that global energy demand would fall 6% in 2020 if lockdowns last longer and recoveries are slow. This decline would be more than seven times the impact of the global financial crisis on global energy demand. In India, energy demand would decline for the first time, following on from low demand growth in 2019.
Climate crisis: Decline in carbon emissions
As such, this decline in carbon emissions is neither structural nor seamless – it bears a huge economic and human cost. It is a direct function of the stalled economic & social activities and does not represent the livable future that we need to build. It is widely acknowledged that energy is a crucial ingredient for economic development. Therefore, we cannot aspire for a world where the gains are offset by such giant losses.
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Significance of a clean and green world
Analyzing the previous global crises, IEA has also warned that the rebound in emissions may be larger than the decline, unless the wave of investment to restart the economy is clean. We must not forget that we were facing the climate crisis even before this pandemic hit us. Therefore, it is imperative to repair the economy and the climate together. During the recovery phase, it is important to put in climate action and think long term. We need to adopt a cautious approach, which is balanced and considers the significance of a clean & green world, which is habitable and caters to the interest of the economy.
Rapid strides of transition to low carbon pathways
What we need is rapid strides of transition to low carbon pathways – energy conservation & efficiency, decarbonization of power generation, industrial & transport sectors, switching to clean energy sources, etc. This would mean building new sources of zero and low-carbon energy like renewables; electrifying vehicles, deploying processes like Carbon Capture, Utilization & Storage (CCUS) technologies, fuel cell technologies, etc.; and making buildings, appliances, and industries more energy efficient. To drive energy transition, adequate intervention is required at different levels – government, businesses, development partners and funders.
To make this transition feasible, government support is essential – incentives should be given to support innovation and encourage transition to a clean energy economy. This will require leveraging multiple policy drivers, i.e. carbon & energy pricing, R&D and deployment policies, market design, standards & regulations, and urban design.
If the government’s role is to establish a clear policy framework to accelerate the transition to the clean energy economy, it is the role of the private sector to take on the hard work of implementation through capital investments, innovation, and deployment of clean technologies.
Development partners should catalyze, leverage, and monitor private investment towards sectors that support green growth and climate action. Funders can fast-track investments in clean energy, especially in developing countries, by unlocking the finance needed to accelerate the transition.
While we have already started seeing action on this front, this transition needs to be accelerated to avoid the most serious impacts of climate change. To substantially reduce the growing risks to business and society from climate change, and to take maximum advantage of the business opportunities in a cleaner future, we must act now.
The columnist is a public policy consultant at Chase India. Views expressed are the author’s own.