The reduction in carbon emissions due to the pandemic was at the expense of unprecedented social and economic constraints. The current challenge is to achieve robust economic development without resuming the same level of emissions as in the pandemic. The future is to make clean energy even more attractive to investors, paving the way for a recovery that accelerates the energy transition
The path of progress towards clean energy
The pandemic has imposed unprecedented restrictions on social and economic activity – particularly mobility – with strong impacts on energy use. Global energy consumption is expected to contract by 6% in 2020, the biggest drop in the last 70 years.
Global carbon emissions have been significantly reduced this year (reaching the lowest level since 2010) as a result of major disruptions in travel, trade and economic activity caused by the pandemic.
The robust economic growth of 2019 was far from the 6% annual reduction required in the International Energy Agency (IEA) Sustainable Development Scenario and which is fully aligned with the paris agreement’s climate targets.
And history tells us that, unfortunately, after past economic crises, emissions have recovered rapidly as economies have recovered as well. While the current crisis may have accelerated some structural changes – such as the decline in coal in Europe – the temporary fall in energy use resulting from mass restrictions on mobility is far from sufficient. Smart and ambitious government policies will be necessary to ensure that sustained structural adjustments enable long-term climate goals to be achieved.
Energy transition
The decline in the world economy has mainly affected demand for oil, which in turn has limited fossil fuel emissions that contribute to the current climate crisis. And that, at first, would look good. But the sharp decline in the oil market could also undermine clean energy transitions, reducing the push for energy efficiency policies, meaning a slowdown in the world’s clean energy transition.
Still, the pandemic and the collapse in oil prices offer an opportunity to consider a new approach that enables the energy transition in a sustainable way, with a truly global collaboration that also helps in recovery.
Large-scale investment to drive the development and deployment of clean energy technologies – solar, wind, hydrogen, batteries and carbon capture (CCUS) – will certainly be the priority on the part of governments. These, directly or indirectly, drive more than 70% of global energy investments and today have a historic opportunity to steer them on a more sustainable path, accelerating the transition of clean energy while leveraging the economy (the IEA estimates that 42 million jobs can be created worldwide by 2050 in the renewable energy sector).
pandemic and the collapse in oil prices offer a unique opportunity to consider a new approach and enable energy transition in a sustainable way
What we decide next is crucial to our energy future. Achieving robust economic development, without resuming the same level of emissions that have occurred in other previous crises, will require governments to take the lead in finding ways out to accelerate the development and deployment of a full range of solutions and technologies.
A systemic approach
We are well known that energy is a critical facilitator of prosperity and economic growth and that the stability of global energy markets is essential to sustainmodern industry and society. We also know that major renewable technologies, such as solar and wind, are increasingly evolved. Hydrogen and carbon capture still requires major investments to scale and reduce costs. Here too, the current economy may be the engine of financing for more affordable projects, the result of lower interest rates. Governments can make clean energy even more attractive to private investors by providing guarantees and contracts to reduce financial risks.
Energy transition
We now have the option of launching strategies, restarting the system and investing in a recovery that accelerates the energy transition. A systemic approach to this process requires concerted and simultaneous action on a number of solutions – including renewable energy, energy efficiency, the circularity of the economy, cutting fossil fuel emissions and building human capital for the future energy system. As companies are revisiting their long-term investment strategies, prospects are open.
Let’s take this opportunity. ISQ has a number of services to help find solutions to this systemic approach. Let us help make this a more balanced world that promotes stability in energy markets and values safety and sustainability, making it more equitable.
Business Development Manager at ISQ. Board Member at dBwave.i Acoustic Engineering. Previously Director of QART.pt and Business Development Project Manager at ISQ Internacional. PhD in Climate Change and Sustainability Policies at the University of Lisbon. Academic training in Engineering, postgraduate training in Project Management from Universidade Católica Portuguesa and WBCSD – World Business Council for Sustainable Development.
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