An aerial view shows pumpjacks in the South Belridge Oil Field on April 24, 2020 near McKittrick, California.
David McNew | Getty Images
The International Energy Agency believes the coronavirus pandemic has paved the way for the largest decline of global energy investment in history, with spending set to plummet in every major sector this year.
In the group’s annual World Energy Investment report, published on Wednesday, the IEA said that the unparalleled decline in worldwide energy investment had been “staggering in both its scale and swiftness.”
It warned the economic impact of the public health crisis could have “serious” implications for energy security and clean energy transitions.
“The historic plunge in global energy investment is deeply troubling for many reasons,” Fatih Birol, executive director at the IEA, said in a statement.
“It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers,” he continued. “The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems.”
Global spending on electricity set to overtake oil
To date, more than 5.5 million people across the globe have contracted the coronavirus, with over 346,700 deaths, according to data compiled by Johns Hopkins University.
The pandemic has meant countries have effectively had to shut down, with world leaders imposing draconian measures on the daily lives of billions of people.
The stringent restrictions, which have brought world travel close to a standstill, are expected to result in the worst economic downturn since the Great Depression in the 1930s.
At the start of 2020, the IEA said global energy investment was on pace for growth of around 2%, reflecting the largest annual rise in spending in six years.
But, after the Covid-19 crisis brought large swathes of the world economy to a halt in a matter of months, the IEA said it now expects global investment to tumble by 20% compared to last year.
To be sure, that’s a fall of nearly $400 billion year-on-year.
KONYA, TURKEY – SEPTEMBER 13: Rows of solar panels are seen at a Tekno Ray Solar farm on September 13, 2018 in Konya, Turkey. By 2023 Turkey plans to generate thirty percent of it’s electricity from renewable sources in an aim to ease dependence on energy imports from Iran, Russia and Iraq. Due to it’s geographical location, Turkey has the second largest solar energy potential in Europe averaging 7.2 sunshine hours per day. (Photo by Chris McGrath/Getty Images)
Chris McGrath | Getty Images
Meanwhile, the Paris-based energy agency said a combination of falling demand, lower energy prices and a rise in cases of non-payment of bills means that energy revenues going to governments and industry are set to fall by “well over” $1 trillion in 2020.
Oil accounts for most of this decline, the group continued, adding that, for the first time, global spending on oil was set to fall below the amount spent on electricity.
“Electricity grids have been a vital underpinning of the emergency response to the health crisis — and of economic and social activities that have been able to continue under lockdown,” the IEA’s Birol said.
“These networks have to be resilient and smart to ward against future shocks but also to accommodate rising shares of wind and solar power. Today’s investment trends are clear warning signs for future electricity security,” he added.
‘Lower emissions but for all the wrong reasons’
The overall share of global energy spending that goes to so-called clean energy technologies, such as renewables, efficiency, nuclear and carbon capture, utilization and storage, has been “stuck” at around one-third in recent years, the IEA said.
In 2020, it will jump toward 40%, they continued, before quickly dashing the hopes of climate activists hoping this could reflect a permanent change.
People wearing face masks walk on the Bir-Hakeim Bridge near the Eiffel Tower in Paris, on March 27, 2020, on the 11th day of a lockdown in France aimed at curbing the spread of COVID-19 (novel coronavirus).
JOEL SAGET | AFP via Getty Images
“In absolute terms, it remains far below the levels that would be required to accelerate energy transitions,” the group said.
“The crisis has brought lower emissions but for all the wrong reasons. If we are to achieve a lasting reduction in global emissions, then we will need to see a rapid increase in clean energy investment,” the IEA’s Birol said.
“The response of policymakers — and the extent to which energy and sustainability concerns are integrated into their recovery strategies — will be critical.”
Birol said the IEA planned to provide clear recommendations for how governments can quickly create jobs and spur economic activity by building cleaner and more resilient energy systems in an upcoming report.
BRASILIA (Reuters) – Facing a criminal investigation that could oust him from office, Brazil’s President Jair Bolsonaro is courting political power brokers he once decried as corrupt in a bid to survive a crisis worsened by his handling of the coronavirus epidemic.
Brazil’s President Jair Bolsonaro wearing a protective mask speaks with journalists, amid the coronavirus disease (COVID-19) outbreak, at the Planalto Palace, in Brasilia, Brazil May 12, 2020. REUTERS/Adriano Machado
The dramatic resignation last month of Bolsonaro’s star justice minister, who accused the far-right leader of seeking to meddle in police enquiries, prompted an investigation authorized by the Supreme Court, which may test the president’s threadbare coalition.
Bolsonaro’s persistent attempts to play down the coronavirus epidemic in Brazil – which now has the worst outbreak of any developing nation – have hurt his popularity with voters and turned former political allies against him.
This week, Brazil’s top prosecutor is questioning ministers about Bolsonaro’s shake-up of the federal police. With two of Bolsonaro’s sons facing criminal and congressional probes, critics accuse him of seeking to protect his family by putting allies in charge of federal police in Brasilia and his hometown of Rio de Janeiro. Bolsonaro has called the accusations untrue and said his family is being persecuted.
If the Supreme Court and two thirds of the lower house of Congress see merit to the possible charges of obstruction of justice and abuse of power, Bolsonaro would be suspended from office and stand trial before the top court.
With that probe looming and calls for impeachment growing louder among opponents, Bolsonaro has begun handing out government positions to a cluster of center-right parties dubbed the “Centrao,” or “Big Center,” hoping to erect a firewall against any push to remove him, two Centrao lawmakers and around a dozen aides told Reuters this week.
However, those parties appear divided internally, making it harder for Bolsonaro to stitch together a coalition on the fly. And in his attempt, he has jettisoned a core campaign promise to put an end to political dealmaking.
Even if he succeeds, new allies could still abandon the president en masse, as they did with former President Dilma Rousseff in Brazil’s last impeachment proceedings four years ago, political analysts said.
Bolsonaro’s predicament shows how the pandemic wrecking Brazil’s economy has also left its politics in disarray, forcing the president to rely on right-wing activists in the streets, military officers in his cabinet, and former foes in Congress.
“Bolsonaro has been really weakened,” said Marcelo Ramos of the Liberal Party (PL), one of the biggest in the centrist bloc. “He has turned to the Centrao to shield himself from any impeachment procedures or parliamentary inquiries that may come.”
As chairman of a congressional pension reform committee, Ramos helped deliver Bolsonaro’s main legislative win last year, an overhaul of Brazil’s retirement system. He said his party has been offered government jobs with control over substantial budgets in exchange for its support, but he said he was against such a move because he wanted to maintain his independence.
Ramos said the government was shopping around appointments in the Ministry of Health, the national health foundation Funasa, educational development fund FNDE, and the Bank of the Northeast, a regional state lender.
Bolsonaro’s office did not respond to a request for comment.
PROMISES OF CLEANUP
Brazil’s political system is highly fragmented, with 22 parties holding seats in Congress. To govern, presidents have often built coalitions through constant horse trading, which has created fertile ground for corruption.
For decades, centrist parties aligned themselves with the government of the day in return for patronage jobs and pork barrel funds. Their support was key in blocking charges of corruption and obstruction of justice against former President Michel Temer in 2017.
Yet Bolsonaro – who denied taking part in such schemes during his three decades as a lawmaker – declared a clean break with those transactional politics when he was elected in 2018.
Indeed, his pledge to end the pay-to-play politics that he blamed on leftist former presidents, including Rousseff, was a key factor in sweeping him to office on a wave of anti-graft fervor.
Rousseff was removed from office in 2016 for mishandling the budget as her party was hammered with charges of bribery and money laundering in the sweeping Car Wash scandal.
As Brazil’s economy plunged into a deep 2015-16 recession and the public soured on Rousseff, several Centrao parties abandoned her government just before the vote to impeach her.
Bolsonaro should keep that betrayal in mind as he reaches out to the same parties, said Creomar de Souza, head of the Dharma Politics consultancy in Brasilia.
“There is no certainty the president’s new allies will be loyal enough to hold his hand through impeachment proceedings if things get serious,” the analyst said. “What price will he have to pay and how will he explain that to his supporters?”
To lure the Centrao into the government, Bolsonaro has no choice but to engage in the kind of political practices that he campaigned against less than two years ago, de Souza said.
Lawmaker Fabio Trad, a former ally in the centrist Social Democratic Party (PSD), has criticized Bolsonaro’s efforts to win over the centrist parties.
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“Bolsonaro was elected to clean up the system, and to our surprise, he is now dealing with parties whose leaders have been caught in corruption investigations,” he said.
On Wednesday a lawmaker from the Avante party, which is part of the Centrao, was named to head the government’s drought-fighting department. Party insiders said the appointment was arranged by Arthur Lira, a Centrao power broker facing trial in the Car Wash investigation for his alleged role in a kickback scheme.
Lira, who has denied committing any crime and is seeking to become the next speaker of the lower house of Congress, declined to comment.
Reporting by Anthony Boadle; Additional reporting by Maria Carolina Marcello; Editing by Brad Haynes and Rosalba O’Brien