Investment in the Future: How a Green Covid-19 Stimulus Package Can Advance the Energy Transition

The corona crisis is not only threatening our health; it’s also shaking our economic systems to the core. A fall of global stock markets by as much as35 per centin the first quarter of this year means that a recession is imminent. The energy sector is also affected, with the price of oil plummetingand renewable energies also facing difficulties. Coronavirus infections, prolonged curfews, short-time work, and border closures are all affecting the supply chains of wind and solar energy technologies. Investment has all but dried up. In this situation we can learn from the experience of tackling previous economic crises and should opt for a “green” stimulus package in a three-step government programme of relief, recovery and reform. To accelerate and bolster the energy transition, all of the measures implemented in these three steps need to be scrutinised for their long-term viability.

Tough trade-offs for new international carbon market mechanisms

Several countries’ national determined contributions (NDCs) highlight climate finance as a precondition for the ambitious action needed to achieve development paths compatible with limiting global warming to 1.5°C in 2100. Many hopes have been pinned on new market mechanisms in this context, but the trade-offs demanded by carbon trading schemes continued to be hotly debated at the UNFCCC last week, not least due to their political and economic implications.

The geopolitics of renewables. A new but messy energy world

Exhibiting the fastest growth among all fuels in the electricity sector, renewables are about to fundamentally change the energy system. This change is hoped to bring about important social and economic co-benefits, including sustainable and affordable energy for all, green job opportunities, and increased human health and wellbeing. But there may also be some fundamentally political implications of the low carbon shift. This is what a high level group of global leaders was tasked to look into, the result of which was published in their recent report titled A New World The Geopolitics of the Energy Transformation, published by IRENA, the international renewable energy agency.