A Sustainable and De-Carbonised Post Pandemic Growth?

Governments can simultaneously create jobs, incentivise economic recovery,  and reduce carbon emissions in a sustainable recovery. The International Energy Agency, in partnership with the International Monetary Fund, has proposed a global Sustainable Recovery Plan to help governments boost economic growth, create jobs, and build more resilient and cleaner energy systems.

It focuses on expanding renewable electricity capacity and electricity grids, expanding electric vehicle production, expanding mass transit, improving energy efficiency in the residential, commercial, and industrial sectors, among others.

Governments across the globe, with the right Investments and plan to expand electricity grids and digitalize grid control, could see a 3.5% higher Global GDP in 2023. Year 2019 saw a definitive peak in global emissions, however, attaining sustainable development goals such as improving access to electricity, increasing clean cooking solutions, and reducing air pollution would make energy systems more resilient.

Decarbonization Strategy and Leaders in the Developing World:

A decarbonization strategy is aspirational that: (i)  sets a vision of where the country wants to be  in  2050  in terms of decarbonization and development goals; (ii) anticipates regulatory and financial barriers in the transition; and (iii) enables the development of policy and investment roadmaps required for the progressive transformation of all sectors.

Costa Rica’s National Decarbonization Plan provides an example. It sets the goal of reaching net-zero greenhouse gas emissions by 2050 by updating agriculture and livestock practices;  using  forests  and  other  high-carbon  ecosystems  as  carbon  sinks;  improving waste management and  recycling; maintaining  electricity  100%  renewable;  electrifying transportation; reducing reliance on private cars; and implementing efficiency measures for buildings and industry.

Most  of  the  net  economic  benefits  of  implementing  Costa  Rica’s  decarbonization plan would come from updated land use practices in rural areas. There, increased agricultural yields, better livestock productivity, and the value of ecosystem services provided by forests (such as renewable forestry products, water and soil benefits, and support for tourism and cultural heritage)  would  bring  US$21  billion  in  net  benefits  to  the  country. This figure is net of required investments and the opportunity cost of land use to reforest.

In total, implementing the decarbonization plan will bring US$41 billion in net benefits to Costa Rica between 2020 and 2050, equivalent to boosting growth by 0.4 percentage points.

Top Indian government officials are debating whether to set a target for net-zero greenhouse gas emissions by 2050. Doing so would mean an overhaul of a coal-reliant energy sector, transport, heavy industry and even the nation’s sluggish bureaucracy.

All that must be achieved while the world’s third-biggest emitter also meets the aspirations of 1.4 billion people for faster economic development, which will only happen with an accelerated pace of industrialization and energy demand.

India will also need to fix its money-losing distribution utilities, make more land available for wind and solar farms, and support development of additional transmission networks. It’ll also have to balance its renewables push against a desire to reduce dependence on foreign suppliers. Taxes on imports of foreign solar panels are intended to spur domestic manufacturing but could make the rollout of cleaner energy more expensive in the short term.

The country will have the fastest growing rate of energy consumption globally through 2050, the U.S. Energy Information Administration forecasts.

The global shift to electric vehicles is happening far more slowly in India, with the costs of battery powered models too high, access to charging infrastructure limited and concerns over the reliability of power grids. By 2040, only about a third of new passenger cars sold will be battery-powered, compared with about 70% in China and Germany.

Seeing the potential, India announced plans for a National Hydrogen Energy Mission. The country could make some of the world’s cheapest hydrogen by 2050 using ultra-cheap renewable power.

Building opportunities for higher and sustainable post-pandemic growth will require re – thinking of growth policies. The Paris Agreement invites countries to design and communicate decarbonization strategies. Thus, countries have an opportunity to reach the goals of a carbon-free future with a consistent regulatory environment across sectors that brings social and economic benefits.