Dr Ferroukhi in front of a purple background

" The world needs to learn how to walk and run at the same time "

In conversation with energy expert Dr. Rabia Ferroukhi of IRENA 

How does COVID19 impact the field of global energy transition? And could it even foster a collective, global response to climate change? We spoke to Dr. Rabia Ferroukhi, Director of the Knowledge, Policy and Finance Centre at the International Renewable Energy Agency IRENA.

by Timour Chafik

Dr. Ferroukhi, as COVID19 hits a world that already is in transition – do you think that it might bring negative or positive impacts within the field of global energy transition?

The energy sector, which is at the center of the global economy, was heavily impacted by the COVID19 crisis. In addition to threatening the health and livelihoods of millions of people globally, the widespread lockdowns enacted in response to the pandemic disrupted supply chains, shrunk demand for certain goods and services, and caused a massive economic contraction around the world. But energy transition-related solutions such as renewables, have proven to be more resilient than other parts of the energy sector. The fossil fuels sector was hit hard with plunging energy demand, especially for transport fuels. 

So the dynamics kicked loose by the crisis may accelerate the energy transition in multiple ways?

On one side, it has unveiled major weaknesses of the current energy system, ranging from climate, air pollution and health impacts, to massive gaps in energy access. On the other side, a post-COVID recovery plan focused on the energy transition can help stimulate economies and create much-needed jobs, both for the short-term and beyond. IRENA estimates that a recovery based on the energy transition would generate an additional 19 million jobs in renewables, energy efficiency and energy system flexibility over the next decade and boost GDP by an extra 1.3% per year compared to countries' planned energy pathways before COVID19. 

 

Are both, politics and the market, currently giving the energy transition the space it needs?

From the market's point of view, financial markets and investors are already shifting their attention toward sustainable assets including renewables. The share of the fossil fuel-heavy energy sector in the US S&P index has fallen from 13% a decade ago to below 3% today. In 2020, investors got enthusiastic about the renewable opportunity. Money flooded into renewable energy stocks; the S&P clean energy stocks were up by 138%, while the fossil fuel-heavy S&P energy index was down by 37%. Politically, a green recovery based on a just transition has been gaining traction. More than 12 countries and the European Union have passed or proposed laws around net-zero emissions and have earmarked significant financial resources to green recovery plans centered around renewables. If anything, the pandemic underlines the fact that we need to move much more decisively away from business as usual. Marginal change needs to give way to systemic change. 

Do you see some kind of a »sustainable infrastructure opportunity« that wouldn't have been there without COVID19?

Governments have a unique opportunity to base their COVID19 recovery on investments in an inclusive, resilient and sustainable infrastructure. In the absence of such a sudden and massive jolt to the socio-economic system – which swiftly dispensed with much of the previously-accepted tight limits on what government could and should do – an ambitious response would have been unthinkable. Whether the world's governments are ultimately able of fully rising to the challenge remains to be seen. 

One lesson learned from the COVID19 pandemic is that only an immediate, collective global response can stem global crises. This is also true of climate change. Would it be too optimistic to think that this collective, global response to climate change will be given?

The world needs to learn how to walk and run at the same time. For a long time, it was assumed that governments should keep their interventions to a minimum, principally to facilitating and enabling the private sector. Now they have to increase their ambition to unprecedented levels, practically overnight. Even within the EU, a long-established multi-national organization, organizing a joint, shared response to the COVID19 crisis is a challenge. Multilateralism is an art that can be perfected only with practice. We should expect that this is not always easy, but missteps should not lead us to conclude that it won't work. Let's avoid both undue optimism and pessimism.