The economic recovery through renewable energy

La relance économique par l’énergie renouvelable

Photo: Boris Horvat Agence France-Presse
Every million us dollars invested in renewable energy sources would create three times more jobs than the same amount invested in fossil fuels.

In his report of some 150 pagespublié Wednesday, the international Agency for renewable energies (IRENA, in English) wants to show a recovery post-COVID focused on the transition, the energy efficiency and renewable energy do not preclude the urgency of a quick economic recovery in the immediate aftermath.

In the short term, the doubling of the annual investment transition on the horizon 2021-2023 could multiply the investment of the private sector by a factor of 3 or 4, said the report. And lead to an addition of 1 percentage point to GDP growth, while creating 5.5 million additional jobs. In the medium term, the increase in energy expenditure, both public and private at the height of 4500 billion US $per year would boost the world economy by 1.3 point further, with the creation of 19 million jobs in the energy transition by 2030. “Every million us dollars invested in renewable energy sources would create three times more jobs than the same amount invested in fossil fuels,” wrote the intergovernmental organization, which has 161 member countries.

The time is especially propitious that the technological innovations, economies of scale, better know-how and financing costs relatively low have made the production of renewable energy competitive. In 2019, 56 % of the new industrial production of these energies was less than the cost of the electricity that would have produced any fossil fuel, including the cheapest of them all : coal, stated the Agency at the beginning of the month.

Every million us dollars invested in renewable energy sources would create three times more jobs than the same amount invested in fossil fuels

— International agency for renewable energy

Much remains to be done

An enthusiasm that, however, came to cool the network of experts REN21, in a report published earlier in June. The development of renewable energies in electricity production is undeniable, but before the break caused by the pandemic, the demand for energy in the world has not ceased to increase.

“The share of renewable energy in the total demand for final energy has very slightly increased, from 9.6% in 2013 to 11 % in 2018 […] renewable energies have certainly made a place in the electricity sector (with a share of 26 %), but is still marginal in the production of heat and cold (10 %) and, even more, in transport (3 %),” wrote REN21.

In a recent presentation before the CORIM, the chairman of the world energy Council, Jean-Marie Dauger, said that the oil ” still cover nearly two-thirds of the needs by the year 2040, or even 2050 “.

To the extent that any transition is part of a broader process calling for a reform of fossil-fuel prices, the withdrawal of assets related to these and to the establishment of financing green, bailouts and political support.

However, the Organization of economic cooperation and development and the international energy Agency reminded us that the direct and indirect support to fossil fuel production was up 38 % in 2019 from 44 advanced and emerging economies.

“In 77 countries studied, the public support to the production, but also to the consumption of fossil fuels, for its part, reached a total of 478 billion US $in 2019. The amount is down 18 % from 2018, but this is due to a decrease in oil prices “, they added.

Still the pricing. Last October, the international monetary Fund reiterated that “the carbon tax is the most powerful instrument and the more efficient” in the fight against climate change. But at a price that should be incentive. Only fifty countries have established one or other form of pricing, for an average world price of carbon equivalent to US $2 per tonne. However, in order to stay on the path to a warming of the planet under the 2 °C the global average should be at least US $75 a tonne, said the IMF.

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