Governments are spending about 2 percent of their budget on clean energy measures, according to new analysis from the International Energy Agency.
Current government plans would increase total public and private spending on clean energy to around USD 350 billion a year by 2023 – only 35 percent of what is envisaged in the Plan.
The majority of funds are being mobilised in advanced economies, which are nearing 60 percent of the investment levels envisaged in the Sustainable Recovery Plan. Emerging and developing economies, many of which have limited fiscal leeway, have mobilised only about 20 percent of the recommended spending levels.
The sums of money, both public and private, being mobilised worldwide by recovery plans fall well short of what is needed to reach international climate goals.
Under governments’ current recovery spending plans, global carbon dioxide (CO2) emissions are set to climb to record levels in 2023 and continue rising in the following years. This would leave the world far from the pathway to net-zero emissions by 2050 that the IEA set out in its recent Global Roadmap to Net Zero.
These findings come from the new Sustainable Recovery Tracker that the IEA launched to help policy makers assess how far recovery plans are moving the needle on climate. The online tool is a contribution to the G20 Ministerial Meeting on Environment, Climate and Energy in Naples, which takes place on 22 and 23 July under the Presidency of Italy.
The Tracker monitors government spending allocated to sustainable recoveries and then estimates how much this spending boosts overall clean energy investment and to what degree this affects the trajectory of global CO2 emissions. The Tracker considers over 800 national sustainable recovery policies in its analysis, which are publicly available on the IEA website.
“Since the Covid-19 crisis erupted, many governments may have talked about the importance of building back better for a cleaner future, but many of them are yet to put their money where their mouth is. Despite increased climate ambitions, the amount of economic recovery funds being spent on clean energy is just a small sliver of the total,” said Fatih Birol, the IEA Executive Director.
Governments have mobilised USD 16 trillion in fiscal support throughout the Covid-19 pandemic, most of it focused on emergency financial relief for households and firms. 2 percent of the total is earmarked for clean energy transitions.