The coronavirus pandemic is currently causing the largest drop in global energy investment ever recorded.
The International Energy Agency (IEA) said the record slump follows the most dramatic plunge in energy demand since the second world war in its latest report.
The report states that falling demand, reduced prices and an increase in non-payment of bills has resulted in energy revenues set to fall by over a trillion dollars during 2020.
The crisis has resulted in economic difficulties and lost jobs but also lost energy supply that will be needed in the future.
Fossil fuels have been the worst affected with expected funding drops of 30% and 15% for oil and coil respectively. The price of oil was badly affected in April due to a market crash which saw US prices turn negative.
Renewables investment will drop by 10%, a blow to the efforts made into tackling climate change.
A 9% decrease in spending on electricity networks is likely to hinder the development of more secure and sustainable power systems. Additionally, investment in natural gas plants has stalled and spending on battery storage is levelling off.
Despite lower emissions, this energy slump is likely to cause environmental issues.
As a result of lockdown measures imposed in many countries globally, the current fall in energy investment has led to a drop off in planet-heating carbon emissions. However, IEA executive director, Fatih Birol, has stated that these lower emissions are ‘for all the wrong reasons’.
It is predicted that the use of fossil fuels is likely to rebound after the crisis causing a spike in CO₂.
China and other countries in Asia are currently putting in orders for a new generation of coal plants for future energy supply, which could cause serious long term damage.
The gradual recent decline in emissions could be undone if the right economic recovery packages are not in place, some countries may turn to traditional energy supply to boost their economies.
In order to see a lasting reduction in global greenhouse gas emissions, a rapid rise in clean energy investment is needed. It is crucial that policymakers across the world seriously consider and incorporate sustainability concerns into their recovery strategies.
Failure to deal with climate change could have a huge future economic impact.
Head of UK energy firm SSE, Alistair Philips-Davies has warned that neglect of climate change could have larger economic impact than that of coronavirus.
Therefore, countries looking to fossil fuels as a recovery strategy may be causing future economic harm as well as environmental harm.
Philips-Davies has urged the UK government to stimulate private investment in renewables by allowing new projects, such as hydrogen and carbon capture plants and boosting electric vehicles, to go ahead.
The IEA stated that in an upcoming report it will provide recommendations to governments on creating jobs and boosting economies through construction of cleaner and resilient energy systems.