The amount of funding that governments are throwing at the economic recovery from COVID-19–more than $12 trillion announced so far, or 15% of the global GDP–is unprecedented. How much of that would it take to put the global energy system on track to meet the goals of the Paris climate agreement? With only a fraction of the pandemic recovery money, we could fund the transition to clean energy.
To keep global warming below 1.5 degrees Celsius, by one estimate, the energy system needs a cleantech investment of about $1.4 trillion annually between 2020 and 2024, or around a tenth of what has been committed for the recovery. “It isn’t a one-time investment, but we wanted to show that when a crisis is treated seriously, there’s money, and there’s a lot,” says Marina Andrijevic, a research analyst at the Berlin-based Climate Analytics and one of the authors of a new paper published in Science. But when the numbers are examined more closely, the difference is much more stark.
With existing policy, the world is already investing $1.1 trillion in clean energy. That leaves an investment gap of only $300 billion to get on a pathway in line with climate science. If we divest from fossil fuel investments–not including fossil fuel subsidies–the gap shrinks even further, to just $20 billion, or 0.2% of the total stimulus funding announced so far. “One of the messages of this is that tackling climate change is not that expensive, which is contrary to the narrative that we often hear–that this is a crazy, expensive mess,” Andrijevic says.
Most energy investment comes from private money, but governments can play a key role in mobilizing that investment through public financing. They can also directly fund some clean energy infrastructure. Many governments are already talking about a green recovery, though the details of each plan aren’t clear yet. But the investment could also create jobs and support the growth of businesses. It comes at a critical time: If the world doesn’t make key investments this decade, we’ll lose the chance to limit warming to 1.5 degrees.
“I dare to speak on behalf of my generation, for whom the choices that we make now, whether we recover in a green way or not, will be decisive for our future under climate change,” she says. “With current policies, we’re heading to 3 degrees Celsius higher than the pre-industrial temperature.”