We’ll never get this chance again – don’t let it slip away

For the first time in our lives, the world paused. Everything stopped: business, transport, shopping, dining, even schooling. We have spent the last three months largely confined to our houses, with some time to reassess our lives (albeit around complicated childcare and zoom calls). I, personally, changed jobs. Before confinement, I was not thinking about becoming the permanent CEO at We Mean Business. During confinement, however, I decided to change course, to redouble my efforts to fight the climate emergency and build back better. As I take my new role as CEO of WMB, the world has a unique opportunity to decide what the ‘new normal’ will be. I believe we have no choice but to invest in our future; we have no choice but to change course. 

As Ministers from countries representing 80% of global energy meet at the IEA Clean Energy Transitions Summit on July 9, they too have had time to reflect on the enormity of the task ahead. They probably realize that this is a once in a lifetime moment. Never again will we see Governments spend so much money at once (an estimated $15 trillion of stimulus globally). They will need to decide if they want to spend this money in a ‘business as usual’ way that has been shown to be unsustainable, or invest in a future that is greener and more resilient, an investment that will yield returns to society in the long run. 

Numerous studies, including from Oxford University, have shown how policy and stimulus packages that incorporate climate targets and conditionality will reduce vulnerability to future shocks and disasters, create good jobs, reduce emissions and ensure cleaner air. 

The IEA’s Sustainable Recovery Plan, which will be central to this week’s summit, spells out exactly how governments can invest in a sustainable recovery with cost-effective measures implemented during the timeframe of 2021 to 2023. These include accelerating the deployment of wind and solar, the modernisation of electricity grids, cleaner transport including electric vehicles and high-speed rail, improving energy efficiency of buildings and appliances, and innovation in hydrogen, batteries and carbon capture.

These align with the We Mean Business policy asks, too. We are calling for policy makers to set policies that advance the delivery of 100% clean power, grid solutions that achieve 100% zero carbon power systems by 2050, the full phase out of coal by 2040, incentives for building retrofits, a phaseout date for petrol, diesel and hybrid vehicles of 2030 or sooner, EV charging infrastructure and grid readiness. Governments should also end all fossil fuel subsidies for producers and consumers no later than 2025. Policy makers should introduce meaningful carbon pricing that gives a clear signal to the market. 

Stimulus packages will be discussed by Energy Ministers at the IEA and some days after Heads of State will discuss this further at the European Council. The IEA’s research suggests that a Sustainable Recovery Plan would see considerable annual emissions reductions but also, and of more interest to Ministers, huge job creation. The IEA’s analysis shows it would save or create 9 million jobs, compared to 3 million jobs already lost in the energy sector during the COVID-19 crisis and the further 3 million under threat.

Ministers will discuss the direction of those investments. The future of the energy sector is electric and renewable. Last year we saw records in lowest auction prices for solar power below 20 USD/MWh in the Middle East, Portugal and California, with the global benchmark at 39 USD/MWh. Estimates predict that solar and wind prices will be on average between 30 and 60 USD/MWh in 2035 (BNEF, 2020). These are already looking like very conservative estimates. Cheap renewable energy will drive electrification of transport and heating and cooling around the world. Green hydrogen is following a similar downward trend, as the cost of electrolyzers falls.

Companies understand that the future is electric, too, which is why 242 companies have committed to RE 100 and 77 to EV100. Not only that, companies believe that the future must be net zero and aligned with science. More than 900 companies have committed to the science based targets initiative and 253 companies across 44 countries are setting emission reduction targets that limit global warming to 1.5°C. In the power sector, Europe’s six largest utilities by market cap now have an approved science-based target or have committed to set one. Companies are also calling on Governments to do more. The likes of Carlsberg Group, EDF, Electrolux, Enel, Iberdrola, Saint-Gobain, Schneider Electric are among more than 1200 companies urging governments to #BuildBackBetter. 

As countries and companies are redesigning the new normal, they need to rethink entire systems along circular economy lines. Systems where waste has no place. This can uncover massive savings, new revenue streams and can substantially reduce emissions: for example, a tonne of steel will produce 2.4 tonnes of CO2, whereas a tonne of recycled steel only 0.4 tonnes [Material Economics, 2019]. 

There is a strong wind of public support blowing behind green investment and #BuildBackBetter too. Nearly two thirds of global survey respondents in April said that their governments’ post-COVID-19 economic recovery should prioritise climate change. A recent poll in the UK found that only 6% wanted the economy to be run in the same way post the Pandemic, with 31% wanting major change.

It is the time to be bold. We have an exciting, positive message to tell – one of job creation, green recovery, cleaner air and greater resilience. Our green stimulus choices will be the difference between success and failure. The time to change course is now. Don’t let it pass you by.

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