Coronavirus pandemic threatens Saudi progress on energy transition, says WEF

The WEF survey - the Energy Transition Index 2020 - shows that 94 of the 115 counties studied have made progress towards cleaner energy sources over the past five years, with 75 per cent of them improving prospects for environmental sustainability. (File/Shutterstock)
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Updated 13 May 2020

Coronavirus pandemic threatens Saudi progress on energy transition, says WEF

  • The turmoil in global energy markets since the start of the pandemic crisis threatens to obstruct that progress, the WEF said
  • Sweden came first in the WEF ranking, followed by Switzerland and Finland. The USA was ranked at 32

DUBAI: Saudi Arabia has shown “strong improvements” in the transition to cleaner forms of energy, but the COVID-19 pandemic is threatening progress towards environmental sustainability in the Kingdom and other countries, according to a new study by the World Economic Forum.

“The coronavirus pandemic risks cancelling out recent progress in transitioning to clean energy, with unprecedented falls in demand, price volatility and pressure to quickly mitigate socioeconomic costs placing the near-term trajectory of the transition in doubt,” the WEF said in its latest global survey of energy policies.

Saudi Arabia improved its ranking on the WEF’s global list of 115 economies in the process of energy transition - up 12 places to 86 - with improvement on the current energy system performance as well as in its readiness for the the move to cleaner fuel and power generation.

“The improvements mainly come from increased levels of capital and investment in energy transition, and a stable policy environment. The Kingdom has initiated ambitious plans to reduce the reliance on fossil fuels, prioritization innovation and Fourth Industrial Revolution,” the WEF said.

But the turmoil in global energy markets since the start of the pandemic crisis threatens to obstruct that progress, the WEF said.

“More recently, the risks of reliance on fossil fuels have been demonstrated by historically low commodity price environment. Given the scale and complexity of energy system, and the tradeoffs associated with energy transition, the process will likely yield gradual results.

“Maintaining a robust enabling environment, characterized by policies, investment, availability of infrastructure, and human capital development can help in making consistent and accelerated progress on energy transition,” it added.

The WEF survey - the Energy Transition Index 2020 - shows that 94 of the 115 counties studied have made progress towards cleaner energy sources over the past five years, with 75 per cent of them improving prospects for environmental sustainability.

“But progress is now stalling – gains since 2015 have only been incremental and breakthrough solutions are urgently required. Furthermore, disruptions from COVID-19 risk cancelling out any progress, even though the pandemic presents an opportunity to consider how to accelerate the clean energy transition,” the WEF said.

Sweden came first in the WEF ranking, followed by Switzerland and Finland. The USA was ranked at 32 - outside the top 25 for the first time since the index was launched in 2015 - “primarily due to the uncertain regulatory outlook for energy transition,” the WEF said.


European bank ramps up stimulus package

Updated 05 June 2020

European bank ramps up stimulus package

FRANKFURT: The European Central Bank approved a bigger-than-expected expansion of its stimulus package on Thursday to prop up an economy plunged by the coronavirus pandemic into its worst recession since World War II.

Just months after a first raft of crisis measures, the ECB said it would raise bond purchases by €600 billion ($674 billion) to €1.35 trillion and that purchases would run at least until end-June 2021, six months longer than first planned.

It also said it would reinvest proceeds from maturing bonds in its pandemic emergency purchase scheme at least until the end of 2022.

ECB President Christine Lagarde scotched speculation that the bank could follow the US Federal Reserve in buying sub-investment grade bonds, saying that option was not discussed by policymakers.

The announcement, which comes just weeks after Germany’s Constitutional Court ruled that the ECB had already been exceeding its mandate with a longstanding asset purchase program, prompted a rally in the euro and bond markets.

“Today’s easing measures were another illustration that the ECB means business and stands ready to do whatever is necessary to help the euro area survive the corona crisis in one piece. The ECB will do its part, and it hopes the governments will do their part,” Nordea analysts said in a note.

The bank dramatically revised downward its baseline scenario for euro zone output this year to a contraction of 8.7 percent from the modest 0.8 percent rise it had forecast only in March.

“The euro area economy is experiencing an unprecedented contraction. There has been an abrupt drop in economic activity as a result of the coronavirus pandemic and the measures taken to contain it,” Lagarde said.

She said she was confident that a “good solution” could be found on the legal stand-off with Germany’s top court.