Top 3 Strategies for Rapid Economic Recovery From COVID-19

By Michael Tobias

In addition to the enormous threat to our health worldwide, COVID-19 has hitglobal economies harder than anything since the Great Depression in the 1930s.It has had a shocking impact on employment and investment in multiple sectors and threatens to stall, if not derail, the net-zero energy goals set for 2030 and 2050.

While the International Monetary Fund (IMF) is responding to the economic crisis caused by the pandemic, providing countries worldwide with emergency financing and debt relief, the International Energy Agency (IEA) has come up with a sustainable recovery plan for governments and policymakers. It relies on three primary goals with strategies that are clearly laid out in the plan of action:

1. Boost long-term economic growth.
2. Create millions of new jobs and save as many existing jobs as possible.
3. Forge energy systems that are cleaner, more resilient, and sustainable than ever before.

Designed to be implemented from 2024 through 2024, the three-year plan focuses on six key sectors:

1. Industry
2. Buildings
3. Electricity
4. Fuels
5. Transport
6. Emerging low-carbon technologies

Recognizing the intrinsic characteristics and differences between countries and regions, the IEA sustainable recovery report takes these different circumstances into account together with current market conditions in different countries as well as existing energy projects of various kinds.

The detailed recovery plan assesses more than 30 energy policies that should be carried out over a three-year period, but warns that a $US 1 trillion investment will be required annually if the plan is to succeed.

Economic Growth

There is not a single country or region in the world that has been spared the brutal shock of COVID-19. While essentially a health crisis, ironically the pandemic has impacted global economies causing severe financial hardship for many millions of people. In part, this has been because governments have been forced by circumstances to take strict measures that have actively suppressed economic activity.

As the virus tore its way through the world, a lockdown of some sort was instituted in most countries, with people, other than health workers and providers of essential services,confined to their homes for much of the time. While actual rules and regulations varied – and continue to vary – most factories were shut down, and only businesses that could operate virtually could continue as usual.

International travel between countries was banned or severely limited, and even national travel was minimized. This predictably led to a visually noticeable decrease in air pollution and even water pollution in some of the world’s filthiest rivers.

The key, says the report, is to put clean energy transitions at the forefront of a sustainable recovery plan and, in this way ensure that the planned economic recovery won’t be associated with an unsustainable rebound in greenhouse gas emissions and air pollution.

The idea of putting investment in clean energy at the heart of a sustainable recovery plan isn’t new. In 2010, after the dire financial crisis of 2008 and 2009, the US government was investing heavily in renewable energy, and energy-efficiency funding was significant in other countries including Germany and China.

There is an urgent need for investment in the energy sector that will boost economic growth, create employment opportunities, and improve future resilience and sustainability.

In a nutshell, the six key sectors mentioned above should, if the plan is followed:

1. Improve energy-efficiency and increase electrification as well as expanding the recycling of materials and other waste.
2. Lead to more efficient new construction and an increased retrofitting of existing buildings to ensure energy-efficiency. Household appliances will be more efficient and there will be improved access to clean cooking methods.
3. Result in electricity grids being expanded and modernized while coal- and gas-fired power generation is carefully managed.
4. Support biofuels and expand their use as well as reducing methane emissions where oil and gas are used. It is vital for fossil fuel subsidies to be reformed. This, in itself, would allow spending to flow to uses that would be more productive and would boost long-term economic growth.
5. Improve urban transport infrastructure and expand high-speed rail networks. New electric vehicles should start making a greater impact on the market.
6. Encourage and help to stimulate the growth of emerging low-carbon technologies, particularly carbon capture, utilization, and storage (CCUS), batteries, hydrogen technologies, and small, modular nuclear reactors. Not only will these new technologies help economic growth but they will also create new jobs.

Ultimately, the IEA plan has been designed to add 1.1 percentage points to economic growth globally during each of the three years specified. The annual growth of developing countries should be boosted by about 1.3% percentage points and the global gross domestic product (GDP) should be 3.5% higher in 2024, at the end of the three-year period, than it would have been.

Presuming countries around the world buy into the plan, and investment in new infrastructure, including more energy-efficient buildings and electricity grids, will improve the overall productivity of capital and workers.

Employment

With economic growth projections dropping daily, the worldwide unemployment count continues to rise at an alarming rate. In late April 2024, the International Labor Organization (ILO) estimated that as many as 300 million full-time jobs could be lost and about 450 million global companies faced the risk of serious disruption. These figures have continued to rise.

The IEA database shows that since 2019, when about 40 million people around the world were employed in various sectors within the energy industry, at least 3 million have been lost or are likely to be lost, with another 3 million lost or threatened in related industries including buildings.

These people range from bricklayers and carpenters to electrical engineers.

Sustaining and creating jobs is fundamental for any economic recovery plan, whether in government, big corporations, small and medium enterprises, or one-man/woman businesses. But it isn’t just a matter of plowing money into the business. Often there is a need for training or re-training so that employees have the skills required for the job. These tally, to a large extent, with the sectors in the section above that discuss economic growth, with the need for job opportunities in the fields of electricity, transport, fuels, industry, technology innovation, and construction.

There is also the opportunity to look at the effects of COVID-19 and offer services that will help alleviate pressures caused by the pandemic. For example, heating, ventilation, and air-conditioning (HVAC) engineers can offer to undertake air quality HVAC checks to ensure that buildings aren’t a high-risk environment for coronavirus infection. Health workers can offer to train staff in any industry to ensure they take adequate precautions to protect themselves and the people they come into contact with from possible infection.

Global Greenhouse Gas Emissions

Perhaps the ultimate irony is that the enormous economic crisis we are facing worldwide has been largely responsible for a steep, very welcome drop in carbon dioxide (CO₂) emissions. Predictions quoted in the IEA sustainable recovery report state that global CO₂ emissions would fall to a figure about 8% lower than 2019, representing the lowest level since 2010.

But the reality is that this dramatic decline in emissions has nothing much to do with structural changes to the way mankind produces energy and uses it. And, the problem is that as world economies recover post-COVID-19, there is a very real danger that these emissions will rebound, just as they did after the 2008/2009 financial crisis which resulted in the biggest emissions increase ever recorded.

Even though the 2008/2009 economic crisis was very different from the one we are facing now, there are experiences we can learn from. For instance, while investment in clean energy after this crisis helped unlock the potential of solar photovoltaic (PV) and wind-power technologies, and make electricity and gas networks more resilient, the truth is that most recovery efforts were carbon-intensive. Having declined considerably by the end of 2009, CO₂ emissions rebounded substantially the next year.

It is complicated, but it is possible to ensure that emissions don’t rebound to such an extent. The first step is to commit to renewable energy and to abandon all types of fossil fuels.

Let’s just hope that a very large percentage of the world’s governments agree to use at least some of the IEA sustainable recovery plan.

Michael Tobias is the founder and principal of Nearby Engineers and New York Engineers, an Inc 5000 Fastest Growing Company in America. He leads a team of more than 30 mechanical, electrical, plumbing, and fire protection engineers from the company headquarters in New York City, and has led numerous projects in New York, New Jersey, Chicago, Pennsylvania, Connecticut, Florida, Maryland, and California, as well as Singapore and Malaysia. He specializes in sustainable building technology and is a member of the U.S. Green Building Council.