Plan says governments and the private sector should deploy $1 trillion annually into the energy sector over three years
  • The International Energy Agency unveiled a pandemic recovery plan to stimulate the economy, create jobs and a sustainable energy sector.
  • The plan urges policymakers to facilitate a $1 trillion annual investment into the energy sector for the next three years.
  • The agency says its plan may create around 9 million jobs in areas such as energy efficiency and the electricity sector.

The International Energy Agency unveiled a post-COVID-19 recovery plan that would require the world to invest $1 trillion annually for three years to boost the global economy, create millions of jobs and push the energy sector into a sustainable path.

“Governments have a once-in-a-lifetime opportunity to reboot their economies and bring a wave of new employment opportunities while accelerating the shift to a more resilient and cleaner energy future,” said Fatih Birol, the executive director for the IEA in a written statement.

The agency released a report Thursday with about 30 specific policy measures covering several sectors, including renewables and the fossil fuel industry. The plan aims to capture the momentum from governments deploying trillion-dollar stimulus plans to pull the world back from the brink of the most severe economic crisis since the Great Depression of the 1930s.

The IEA estimates the plan could lead to a 3.5% expansion of the economy by 2023, the equivalent of adding another “Japan” to the global economy in the next few years, said Laura Cozzi, the chief energy modeler at the IEA, during an online presentation.

The Paris-based agency, which advises governments on energy matters, says this year’s slump in investments may cause the economy to shed about 6 million energy-related jobs. The agency says its plan may create around 9 million employment opportunities if governments create policies to support retrofitting buildings to boost energy efficiency, constructing electricity grids as well as building solar and wind farms.

The agency advocates for the expansion of urban infrastructure like electric vehicle charging stations and hydrogen-based technologies that can be used for home heating and transportation.

The IEA says governments should consider implementing carbon pricing, a type of tax levied on the production and consumption of fossil fuels which could discourage their use and reduce emissions. The agency also suggests developing countries expand policies that give gas assets priority access to the electricity grid, ahead of more polluting coal-fired power plants.

The report says policymakers should support nuclear and hydropower, which combined provide 70% of all low-carbon electricity in the world.

The agency says developing countries may gain the most from the plan. It would accelerate the world’s pace to meeting the United Nations sustainable development goals. If properly implemented, the plan gives 270 million people access to electricity and about 420 million people access to clean cooking solutions.

The IEA says the world may cement some of the gains in carbon emissions reductions through its plan. Otherwise, some ESG investors fear a repeat of the 2009 global financial crisis, where following a recovery, global carbon emissions surged by the largest increase in history, says the agency.

The agency claims its policy suggestions “would make 2019 the definitive peak in global emissions, putting them on a path towards achieving long-term climate goals, including the Paris Agreement.”