Neil Eisberg | Editor
In the months since COP26 in November 2021, the continuing questions have been: What has happened since the discussions ended? Has any progress actually been made? Will there be a re-run of the same discussions in Egypt at the next COP?
Well, the latest update in the International Energy Agency’s (IEA) Recovery tracker would seem to demonstrate that action has in fact followed the words.
The drive to net zero carbon by 2050 has benefited from the Covid-19 crisis, which has spurred a host of recovery spending announcements including funding for clean energy projects. The level of this spending, earmarked by governments around the world, has jumped by 50% over the past five months, to now stand at $710bn worldwide. This is more than 40% higher than the global green spending contained in stimulus funding that was introduced by governments after the 2008 global finance crisis. However, this still represents just a relatively small proportion of the total forecast global government spending of $18.2 trillion designed to counter the impact of Covid-19.
As might be expected most of this funding for clean energy projects is being provided by the advanced economies, over $370bn of which is designed to be spent by the end of 2023.
Among the emerging and developing economies, however, the funding dedicated to the development of sustainable recovery measures is one tenth of the amount of the developed economies, according to the IEA. In comparison, just around $52bn of sustainable recovery spending is planned by the emerging and developed economies by the end of 2023. And this spending is now under pressure as a result of the continuing Ukraine crisis, which is threatening food and fuel affordability due to surging commodity prices.
‘Countries where clean energy is at the heart of recovery plans are keeping alive the possibility of reaching net zero emissions by 2050, but challenging financial and economic conditions have undermined public resources in much of the rest of the world,’ according to Fatih Birol, IEA’s Executive Director. ‘International cooperation will be essential to change these clean energy investment trends, especially in emerging and developing economies where the need is greatest.’
The IEA points out that even in advanced economies, some of the earmarked funds risk not reaching the market within their envisaged timelines. ‘Delays in setting up government programmes, ongoing supply chain disruptions, labour shortages and financial uncertainty have clogged project pipelines. In addition, consumer-facing measures – such as incentives for building retrofits and electric vehicles – are struggling to reach a wider audience because of issues including red tape and lack of information.’
‘Governments who can remove red tape and quickly set up effective programmes will be the ones to reap the benefits and position themselves in the new global energy economy that is emerging,’ said Birol
Although many commentators express a belief that the transition from fossil fuel energy to renewables needs to move faster, UK respondents to a recent survey commissioned by engineering and technology consultancy Vysus Group suggested that this transition in fact should be slower. While over 93% believed that COP26 has ’galvanised’ the UK, 93% of respondents said the UK is ‘moving too quickly’. As might be expected, larger companies were more positive in their outlook, while smaller companies highlighted a lack of resource as a contributing factor to their belief in a need for a slower approach.
In terms of differences between age groups of respondents, perhaps unsurprisingly, those under the age of 34 believed that COP26, across the board, has led to sustainability planning becoming a bigger priority. In addition, this group also came out top when asked if their own business was doing enough towards the transition to renewables.
This research formed part of the Vysus Group’s launch of Planit22, a year-long campaign aimed at heightening awareness of the solutions and issues faced by internal and external stakeholders worldwide as they adjust and transition to meeting sustainability commitments.
The CEO of the Vysus Group, David Clark said: ‘That such a high percentage of respondents feel that the transition to renewables is moving too quickly comes as no surprise, but we have to put that into context given these people are highly informed; they know what is required to hit targets not least the sheer scale of capital investments, planning, due diligence and risk analysis.
‘No-one is disputing the objective, or what needs to happen. It’s the “how” that is under scrutiny here, and those who aren’t talking about timing as an issue, those not directly involved in the process, who have less awareness of the real challenges involved. As we have seen repeatedly throughout our history, the evolution and deployment of technology can rapidly disrupt and transform how our world works, and while this will be a critical factor in delivering on transition objectives, this will need to be supported by governments to ensure infrastructure can keep pace with these transformations.’