Oil Rises as IEA’s Tracker Shows Low Clean Energy Spending
Oil rises further on Wednesday after extending gains from the previous session as the United States International Energy Agency (IEA) Sustainable Recovery Tracker shows inadequate cleaning energy funding.
Brent crude futures gained $2.53, or 3.7%, to $71.88 a barrel while U.S. West Texas Intermediate (WTI) crude futures rose $2.69, or 4%, to $69.89 a barrel.
The market record shows that futures are rebounding after dropping around 7% early in the week following a deal by the Organization of the Petroleum Exporting Countries and allies, OPEC+, to boost supply by 400,000 barrels per day from August through December.
Meanwhile, the sell-off was exacerbated by fears that arise in cases of the Delta variant of the coronavirus in major markets like the United States, Britain and Japan will affect demand.
Prices expanded despite the fact that the latest data from the United States showed that crude inventories inched higher 2.1 million barrels last week to 439.7 million barrels, U.S. Energy Information Administration data showed.
Low energy spending was spoted as IEA’s Sustainable Recovery Tracker analyses more than 800 policy decisions taken across more than 50 countries in relation to delivering the economic recovery from Covid-19.
“With only 2% of governments’ recovery spending going to clean energy transitions, global emissions are set to surge to an all-time high”, IEA said.
The Tracker reveals that, between March 2020 and June 2021, governments collectively spent $380 billion on clean energy measures. Included in this figure are new subsidy schemes, direct and indirect funding.
“While this level of support is likely to result in an extra $350m per year being funnelled into the sector through to 2023 – a 30% hike in investment – $380 million is ultimately only 2% of the financial support offered in response to the pandemic”, it said.
Moreover, this represents 35% of the level of funding recommended by the IEA in its recent roadmap to net-zero by 2050.
The report also highlights disparities in funding between wealthy and developing nations. G20 nations have announced funding equivalent to 60% of the level recommended by the IEA, but the proportion stands at 20%, on average, among the emerging and developing economies studies.
In a separate report published earlier this year, the Agency stated that a sevenfold increase in renewable energy investment would be needed across the Global South to deliver net-zero.
According to the IEA, unless green recovery plans are scaled up and high-carbon investments pared-back, global emissions are likely to climb to record levels by 2023 and continue to rise in the years thereafter.
The emissions increase will be 800 million tonnes lower than if no green recovery efforts were enacted, but, nonetheless, the world will remain off-track to deliver the Paris Agreement or net-zero by 2050.
About 90% of the growth in emissions forecasted will come from the Global South, the Tracker states.
“Since the Covid-19 crisis erupted, many governments may have talked about the importance of building back better for a cleaner future, but many of them are yet to put their money where their mouth is,” the IEA’s executive director Faith Birol said.
“Despite increased climate ambitions, the amount of economic recovery funds being spent on clean energy is just a small sliver of the total.
“Since the Covid-19 crisis erupted, many governments may have talked about the importance of building back better for a cleaner future, but many of them are yet to put their money where their mouth is.
“Despite increased climate ambitions, the amount of economic recovery funds being spent on clean energy is just a small sliver of the total.”
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Birol concluded that there is still time to put the world on track for net-zero emissions by 2050, but that this window is “narrow”.
Oil Rises as IEA’s Tracker Shows Low Clean Energy Spending
