Russia’s aggression in Ukraine has eased concerns about both energy transfers and energy security. At the same time, product prices have skyrocketed in recent months.
Marcus Brandt | Photo Alliance | Getty Images
The International Atomic Energy Agency (IAEA) says governments around the world have pledged more than ৭ 610 billion in “sustainable recovery” by 2030 since the outbreak of the Kovid-19 epidemic.
This represents a 50% increase over the October 2021 figure and “the largest clean energy financing effort ever” according to the IEA.
Despite this increase, the latest update to the IEA’s Sustainable Recovery Tracker warns that regional imbalances are a cause for concern due to rising commodity prices following the Russia-Ukraine war.
In a statement earlier this week, the Paris-based firm said developed economies want to spend $ 370 billion before the end of 2023.
It described it as “a level of short-term government spending that will help keep the IEA’s global net zero emissions open by 2050.”
For other parts of the world, however, the story is different. Emerging and developing economies plan to spend about 52 52 billion on “sustainable recovery” by the end of 2023, according to the IEA. It says it has “very little” of what was needed for a net zero emissions path. In the middle of this century.
The IEA says the gap is unlikely to narrow in the near future, as governments with already limited financial resources now face the challenge of maintaining food and energy savings for their citizens amid rising commodity prices following Russia’s invasion of Ukraine. “
The IEA’s vision for what constitutes a “clean energy and sustainable recovery system” is broad. This includes everything from nuclear, wind, solar photovoltaics and hydro to retrofitting, electric vehicles, transit infrastructure and recyclable investments.
Russia’s aggression in Ukraine has eased concerns about both energy transfers and energy security.
Russia is a major supplier of oil and gas and in the last few weeks several major economies have made plans to reduce their dependence on hydrocarbons.
At the same time, product prices have skyrocketed in recent months. According to the United Nations, its Food and Agriculture Organization (FAO) food price index averaged 159.3 points in March, up 12.6% from February.
In a statement last week, FAO Director-General Ku Dongyu outlined the challenges the world is facing. Food prices, measured by the index, have reached a new all-time high, he said.
“In particular, the prices of major food items such as wheat and vegetable oil have been rising lately, imposing unusual costs on global consumers, especially the poorest,” Dongyu added, adding that the war in Ukraine “has made matters worse.”
A huge job
According to the United Nations, global warming “should not be kept above 1.5 degrees Celsius … emissions should be reduced by 45% by 2030 and net zero by 2050.”
Figure 1.5 refers to the Paris Agreement, which aims to limit global warming to “below 2, especially 1.5 degrees Celsius, compared to pre-industrial levels” and was adopted in December 2015.
The work is huge and the risks are high, with the United Nations noting that 1.5 degrees Celsius is considered an “upper limit” when it comes to avoiding the worst consequences of climate change.
“Countries with a focus on clean energy recovery plan have the potential to reach net zero emissions by 2050, but challenging financial and economic conditions have depleted human resources in most parts of the world,” said Fatih Biral, IEA’s executive director on Tuesday.
Biral added that international cooperation “would be essential to change the trend of this clean energy investment, especially in emerging and developing economies where it is most needed.”
While the picture for developed economies may seem brighter than emerging and developing ones, the IEA points to a number of potential problems moving forward, saying that “certain funds run the risk of not reaching the market within their planned timeframe.”
The project’s pipelines, it claimed, were “frozen” due to delays in setting up government programs, financial uncertainty, labor shortages and continued supply chain disruptions.
On top of that, “consumer-oriented measures” such as retrofit and incentives for electric vehicles were struggling to reach a wider audience because of problems with “red tape” and a lack of information.
Looking at the overall picture, the IEA says that “public spending on sustainable energy” remains a “small proportion” of the $ 18.1 trillion in financial outflows focused on mitigating the economic impact of the epidemic.