Fossil fuels win big as nations dole out recovery funds
Data compiled by 14 organizations follows a complaint last week by United Nations Secretary-General António Guterres, who blasted governments for continuing support for fossil energy sources in the face of global warming instead of investing those billions of dollars in a low-carbon energy transition (Climatewire, July 10).
“Twice as much recovery money, taxpayers’ money, has been spent on fossil fuels as clean energy,” Guterres said.
A study led in part by the Stockholm Environment Institute mostly backs up his assertion.
The research coalition says it’s conducted the most detailed survey of post-COVID-19 economic recovery planning and spending to date. Its data shows governments of the Group of 20 largest economies have directed some $151 billion toward fossil fuel sectors. “Clean energy,” which the groups define as mainly wind and solar power but also hydropower, received some $89 billion in spending.
“While rhetoric about the need for a green recovery has grown louder in the policy space, this data shows that, in reality, fossil fuel producers and high-carbon sectors, such as airlines, are currently receiving 70% more recovery aid than the clean energy,” the research team said in a release.
It reached its findings after reviewing more than 200 stimulus spending measures and policies issued by the Group of 20 governments to boost major national economies hit hard by the lockdowns and layoffs that have ensued due to the novel coronavirus pandemic.
The study on recovery spending energy priorities was spearheaded by the Stockholm Environment Institute and Columbia University; the International Institute for Sustainable Development in Canada; the Overseas Development Institute; and research institutions in Australia, Germany and Mexico.
“The tracking system shows how the fossil fuel industry has continued to aggressively lobby policy-makers,” Overseas Development Institute research officer Angela Picciariello said in a statement. “This has resulted in some so-called conditional fossil fuel policies that nevertheless lock in dangerous emissions for decades to come.”
A breakdown in the path of government economic recovery package spending is laid out in a new website created by the coalition. Its Energy Policy Tracker online portal went live today.
The United Nations called for a major global push toward low- or no-emissions energy sources and away from fossil fuels during national responses to the 2008-2009 global financial crisis as well. What followed instead was a historic oil boom in the United States and a massive uptake of new coal-fired power generation and a subsequent huge increase in greenhouse gas emissions in China.
Acknowledging this, Columbia professor Tom Moerenhout said that governments have an opportunity to change their behavior this time around.
He argued that renewable energy technologies were less developed and more expensive during the aftermath of the U.S. housing market bubble collapse and the Great Recession that it led to.
“In 2008, alternatives were less mature and more costly than they are today,” explained Moerenhout, who is also affiliated with the International Institute for Sustainable Development and the World Bank. “This was especially true in the electricity sector. The cost reduction wave of wind and especially solar really happened in the last decade.”
The failure of the green recovery push in 2008 also largely stemmed from the fact that the global economy and trade were overwhelmingly dependent on fossil fuels, and in part from the lobbying prowess of fossil fuel industrial sectors, which “are definitely risk factors today as well,” he added.
Moerenhout said the world is in a better position to use stimulus spending to finance climate change mitigation and a real transition away from carbon-heavy energy sources. He said that in many cases renewable energy investments are more cost-effective, and he argued that governments could use the opportunity that stimulus spending offers to make huge gains in energy efficiency and to put aging, inefficient coal plants out of operation.
“Reducing least-efficient coal power is a must to stay below 1.5°C warming and to decrease air pollution. For this, cost-competitive solar and wind energy are crucial,” Moerenhout said. “Yet we see various countries intensifying coal mines and coal power plants rather than moving away from them. This is mostly political opportunism, rather than a well-thought-out economic recovery strategy.”
COVID-19 recovery plans are largely aimed at traditional responses to financial crises rather than at sparking a “green recovery,” as Guterres and others have called for.
According to the International Monetary Fund, only Austria, Finland and Lithuania have announced new major infusions of money into climate funds. France and Germany have announced plans for subsidizing renewable energy and electric vehicle manufacturing, while Norway and Sweden said they will spend on a “green transition package” and “initiatives for green jobs,” IMF says.