Five Key Principles for a Fossil-Free Recovery
How did COVID-19 affect the energy transition?
COVID-19 has changed the way we perceive the future, from what kind of energy we’ll use to how we will use it. Due to the pandemic, people use more energy in their homes and travel much less, if at all. While we all hope that these circumstances are temporary, it is possible that they could lead to long-term behavioural changes in energy use. It’s an opportunity for governments to plan smart policies that encourage a shift to cleaner forms of energy and more efficiency as the energy sector moves forward.
How have governments reacted to the COVID-19 crisis?
We have seen governments use COVID-19 recovery packages to put a lot of money into the energy sector. In general, countries that were already supporting the clean energy transition continued to do so by investing in renewable energy or electric vehicles. At the same time, countries that were dependent on the fossil fuel sector have spent a great deal of stimulus funding on non-renewables. The pandemic has placed us at a crossroads, and the decisions made by governments now will have huge impacts on the clean energy transition.
How can leaders take climate action while recovering from COVID-19?
This is an opportunity to plan an economic recovery that creates jobs by accelerating the move to clean energy while making sure that the transition away from fossil fuels is equitable. That means a transition should create opportunities to develop a fairer and more inclusive society by considering people and communities as we develop new ways of strengthening the economy and doing business.
What does it mean when we say that the recovery should be “fossil free”?
It means that we need to move away from fossil fuels. It doesn’t mean that our activities will suddenly stop. It's about using climate-friendly and cleaner alternatives to traditional energy sources. For example, instead of investing in new coal or gas power plants, countries can invest in wind turbines, solar panels, and electric grids. Instead of subsidizing gasoline and diesel, governments can buy electric buses for cities where people use this type of public transportation.
The pandemic has placed us at a crossroads, and the decisions made by governments now will have huge impacts on the clean energy transition.
There are many other options and examples. But one thing is certain: the government's role is key because they define the policies and decide where public money is spent. Overall, instead of supporting fossil fuels, they can swap that spending for clean alternatives.
What should be done in the short term and the long run to implement this idea?
Our report Achieving a Fossil-Free Recovery promotes five main principles.
First, stop using stimulus funding to perpetuate the production of fossil fuels, especially if the funding is not assisting with the clean transition.
Second, governments should reform fossil fuel subsidies or implement taxes to raise revenue for the sector’s transition. These measures help to reflect fossil fuels’ true cost to society: they cause climate change and air pollution and come with high health and economic costs.
Third, instead of subsidizing fossil fuels, governments should swap that funding with cleaner alternatives to work toward the net-zero target and better meet people’s needs.
Fourth, governments should incentivize private investments in clean energy.
Lastly, while enacting these measures, governments should ensure a just transition by considering the effects on workers and communities.
How do you convince governments of fossil fuel-dependent economies that these actions are necessary?
Instead of trying to convince them, we have to help them see that change is happening regardless of their actions. Every day, more and more insurance companies and investment funds choose to diversify their money away from the fossil fuel sector. But at the same time, we know that this is not easy and that there are going to be a lot of people and businesses that are quite affected by this. On the other hand, new industries will arise that will need workers and investors.
The main message for governments is that it is possible to plan a transition. That’s the key word: plan. All the social, environmental, and economic risks must be considered and mitigated as much as possible. To do that, planning has to be rooted in a dialogue between the different groups that are likely to be affected by the shift. That is what we call a “just transition.”
Is it possible to get all countries on board when there are so many considerations at play, such as different economic systems, levels of deployment, and fossil fuel dependency?
It is possible if we consider local context and priorities. For example, in Africa, a high percentage of the population does not have access to electricity at home or even to clean cooking fuels so it makes no sense to promote purchasing electric vehicles there. But a fossil-free energy transition also means increasing access to clean energy, so governments could invest in community solar power plants instead of expensive diesel generators.
All the social, environmental, and economic risks must be considered and mitigated as much as possible.
They could also remove subsidies for transport fuels. This measure is unpopular because it causes the price of gasoline and diesel to increase. But the truth is, it’s the affluent segments of the population who benefit most from gas and diesel subsidies, as they own cars. Governments should instead subsidize forms of clean public transportation or provide cash transfers to those who will suffer the direct effects of price increases.
There are also studies showing that improving access to public services, such as health or education, is a good alternative for people who might suffer due to fossil fuel subsidy reform. Ultimately, there are many options, but it’s critical that the local context is carefully analyzed and understood.
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