Sumant Sinha, Chairman and Managing Director, ReNew Power
Nations need to direct investments towards a green and healthy recovery, as insurance against future disasters. The paper argues that renewable energy can revitalise the economy by creating “green” jobs, ensuring energy security and strengthening resilience. To that effect, Europe has set the early benchmarks for a global green recovery.
Towards a green, equitable and resilient future
The COVID-19 pandemic has taken a devastating toll on lives, livelihoods and economies globally. However, a silver lining to the cloud was that it enabled us to catch glimpses of a better world – cleaner air, blue skies and reduced emissions, besides reinforcing the value of public health.
We are now at a pivotal moment, as national governments design stimulus packages to reboot their economies. We simply cannot afford to return to “business as usual” and continue to pursue a high-carbon, unsustainable growth template. Rather, global recovery measures should target a green, equitable and resilient future.
As nations press the “reset” button, they need to make the right choice and direct investments towards a green and healthy recovery, which is the best insurance against future disasters. The pandemic has only strengthened the case for accelerating the transition to clean energy. As we “build back better” we must be careful not to place sustainability on the back burner, but rather ensure that renewables and other clean technologies are at the heart of rebuilding strategies.
Green job creation and reduced import bills
A low-carbon growth path can stimulate the economy as well as mitigate climate risks. Renewable energy can revitalize the economy by creating “green” jobs, ensuring energy security and strengthening resilience. Each million dollars invested in renewables or energy flexibility could create at least 25 jobs, while each million invested in efficiency would create about 10 jobs. The International Renewable Energy Agency (IRENA) estimates that transforming energy systems based on renewables could boost global GDP by $98 trillion by 2050, and create 63 million new jobs globally in renewables and energy efficiency. In India, which saw over 100 million job losses during the lockdown, 1.3 million full-time jobs can be created by achieving 160 GW from renewables by 2022.
A shift towards renewables can help countries such as India and China save vital funds through a drastic reduction in their import bills. Even if half the generated renewable power is used to replace imported coal, India can save over $90 billion between 2021 and 2030. As a major source of harmful emissions, coal has always been associated with negative consequences. The fact that renewables are now the cheaper alternative in most countries makes a compelling case for funnelling spending on coal imports towards speeding up adoption of renewables. It is also essential that we cut back on fossil fuel subsidies wherever they are still significantly large, especially with oil prices plunging.
Cleaner air and improved health
The pandemic has brought the need for clean air and health considerations to the forefront. Globally, more than 4 million premature deaths per annum can be attributed to air pollution, while the World Health Organization has identified climate change as a major cause of infectious diseases and spread of antimicrobial resistance, raising the risk of future epidemics.
A recovery driven by renewables can tackle the twin challenges of air pollution and climate change by curbing greenhouse gas emissions, thus reducing vulnerability to life-threatening diseases. Last but not least, a renewables-driven recovery will contribute to more equitable and inclusive growth by improving access to energy. This can dramatically improve living standards in disadvantaged communities – by assuring them of basic amenities like healthcare, food, water.
Europe is leading the way
Traditionally, Europe has led the world in tackling climate change and, not surprisingly, it has once again set the early benchmarks for a global green recovery. Amidst the Trump administration slashing green protections and China sending mixed signals, as evident from its recent investments in coal-fired power plants, the EU has shown positive intent by setting aside 25% of its nearly €850 billion recovery package for building energy-efficient infrastructure; investing in renewables and other clean technology, such as batteries, clean hydrogen and carbon capture; promoting low-carbon mobility and installing 1 million EV charging points; fostering sustainable land use and preserving biodiversity. It is also considering a landmark border tax on carbon-heavy imports from other countries.
There are several instances of individual nations announcing green stimuli. For example, France has made its $11 billion bailout for Air France conditional on the latter halving its domestic emission levels by 2024. Denmark plans to spend $4 billion on green renovations to social housing; and the UK has set up a $44 billion Clean Growth Fund for R&D in green technologies.
It is important that other governments take a leaf out of Europe’s book and adopt a policy and investment response that is geared towards a sustainable and just recovery. We also need other stakeholders to step up: corporates to adopt sustainable and clean business practices; and investors to decarbonize their portfolios and back the renewables sector. Civil society must actively support plans for a green and just recovery by adopting sustainable lifestyles.
It is evident that global recovery plans must be aligned to the vision of the UN’s Sustainable Development Goals and Agenda 2030, for an equitable, healthy and resilient future. By making energy transition an integral element of the wider recovery plan, nations can build the much needed capacity to absorb shocks from pandemics or similar disruptions. Enhanced cooperation across the global community can help frame a robust action plan and ensure adequate funding for expediting the global green recovery. As we restart our economies, we owe it to our future generations to choose the right path and opt for a low-carbon development model.
Charles Telfair Centre is an independent nonpartisan not for profit organisation and does not take specific positions. All views, positions, and conclusions expressed in our publications are solely those of the author(s).
This article was first published by the World Economic Forum Global Agenda