Renewables could add $A160 trillion to post Covid-19 economic recovery

Renew economy

 

Strong investments in clean energy could be the secret to pulling the global economy out of a Covid-19 induced slump, with Australia well positioned to benefit from a surging solar industry that could employ more people than the entire fossil fuel sector.

The forecast has been outlined in the first Global Renewables Outlook published by the International Renewable Energy Agency, which predicts strong clean energy stimulus measures could both achieve the net zero emissions goals of the Paris Agreement while generating benefits of an extra $100 trillion (A$159 trillion) to global GDP above business as usual.

IRENA has used the findings to call for renewed focus from governments to ensure the measures taken in response to the Covid-19 disruption also have a view to the long-term needs of the global economy.

“The Covid-19 pandemic is devastating people’s lives and disrupting economies. The response must focus on saving lives and providing immediate support for livelihoods,” IRENA’s director-general Francesco La Camera said.

“But we will also look at how to rebuild our economies. IRENA’s Global Renewables Outlook provides a pathway to this future. The report highlights the importance of aligning short-term recovery efforts with the medium and long-term objectives of the Paris Agreement and the UN Sustainability Development Agenda.”

The investment necessary to transition the global energy system to clean energy source is substantive, estimated to be up to US$130 trillion (A$207 trillion) by 2050, but the economic benefits will be even larger, boosting global economic output and a quadrupling of renewable energy jobs to 42 million globally.

A further 21 million people could be employed in the energy efficiency sector by 2050 under an ambitious energy transition plan, along with an additional 15 million people providing system flexibility services.

Under an ambitious scenario out to 2050, a move to decarbonise the energy sector would lead to a net gain of 13.3 million jobs globally with increases in renewable energy jobs more than offsetting employment losses in the fossil fuel sector.

IRENA hopes that the report can be used as a motivator to ensure investments in clean energy can have a central place in the economic recovery from the impacts of the Covid-19 pandemic.

“Governments are facing a difficult task of bringing the health emergency under control while introducing major stimulus and recovery measures. The crisis has exposed deeply embedded vulnerabilities of the current system,” IRENA’s director-general Francesco La Camera added.

The forecast has been based on a detailed assessment of the technologies required to decarbonise the global energy system by 2050 completed by IRENA, and includes pathways for a ‘climate safe’ development scenario and a pathway towards complete decarbonisation.

IRENA found that if governments were to adopt a pathway consistent with the Paris Agreement goals to achieve net zero emissions by 2050, investments in clean energy technologies would provide greater employment opportunities across all global regions.

IRENA projected potential job growth in the Oceania region, dominated by Australia and New Zealand, and predicted that the region’s renewable energy sector could experience above average growth over the next three decades, expanding eight-fold to an almost 300,000 strong workforce predominantly in the solar energy sector.

According to the IRENA forecast, employment in the region’s solar sector could surge to 216,000 people by 2050, with strong growth also shown in the energy efficiency (62,000 jobs), bioenergy (56,000) and wind (12,000) sectors.

This growth more than accounts for an inevitable contraction in employment in the fossil fuel sector as the use of coal, gas and oil is phased out.

Source: IRENA

IRENA estimates that as many as 42 million people could be employed in the global renewable energy sector by 2050, approximately three times as many people as were employed in the sector in 2017.

Much of this employment growth will benefit the Asia-Pacific region, with almost two-thirds of the global renewable energy workforce set to be employed within the region under the IRENA projections.

jobs growth by sector IRENA
Source: IRENA

“IRENA’s Outlook shows the ways to build more sustainable, equitable and resilient economies by aligning short-term recovery efforts with the medium-and long-term objectives of the Paris Agreement and the UN Sustainable Development Agenda.”

“By accelerating renewables and making the energy transition an integral part of the wider recovery, governments can achieve multiple economic and social objectives in the pursuit of a resilient future that leaves nobody behind,” La Camera added.

In addition to the substantial economic benefits that would come with stronger investment in clean energy technologies, significant improvements to general welfare would also be achieved, particularly through reductions in the impacts of global warming and improvements to general health and wellbeing through reduced pollution.

IRENA suggests that when these health and welfare benefits are taken into account, the investments made in clean energy projects under an ambitious plan out to 2050 would more than pay themselves off, delivering as much as an eight-fold return on investment.

The IRENA report comes as governments are warned of the influence exerted by incumbent industries during times of economic crisis. Researchers from the Australian National University published behavioural modelling, which suggests industries, like the fossil fuel sector, are able to use their influence during periods of economic downturn to successfully lobby for relaxed regulation.

Australia’s clean energy industry bodies have called on the federal and state governments to include support for the renewable energy sector in economic stimulus measures, as an ideal way to generate lasting benefits for the Australian economy, but support has so far been slow.

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Michael Mazengarb is a journalist with RenewEconomy, based in Sydney. Before joining RenewEconomy, Michael worked in the renewable energy sector for more than a decade.
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