This runs counter to stated government intentions to accelerate clean energy transitions to manage exposure to global fossil fuel markets, notably plans like REPowerEU to drastically cut natural gas use this decade. New allocations for clean energy investment support totalled almost USD 130 billion in the past six months, making it one of the slowest periods of activity since Q2 2020. This affordability spending continues to climb, with over USD 270 billion allocated in the last 6 months, even as prices, notably in Europe, have begun to abate, albeit remaining well above historic levels. Since the start of the global energy crisis, governments have allocated USD 900 billion to short-term consumer affordability measures. Accordingly, the vast majority of spending on both affordability and clean energy remains concentrated in advanced economies, which now account for 93% of total government clean energy investment support and 85% of consumer affordability support tracked to date. This balance is particularly difficult in emerging market and developing economies due to pre-existing financial strains. This could threaten some countries’ ability to balance short-term relief with parallel efforts to address energy security and affordability through improved energy efficiency and clean energy investment. Emergency measures played an important role in shielding consumers from energy price spikes, but weighed heavily on government balance sheets, as fossil fuel subsidies reached an all-time record high in 2022.As a result, governments in emerging market and developing economies have dedicated to date more to consumer affordability measures (USD 140 billion) than to clean energy investment support (USD 90 billion) since 2020. Levels of consumer support spending have also increased in emerging and developing economies, largely through governments compensating energy companies for operating losses borne by keeping prices stable during the energy crisis. The European Union is responsible for two-thirds of government affordability support worldwide, having borne some of the steepest increases in electricity and gas prices in 2022.Around 30% of this affordability spending has been announced in the past six months, and despite calls to better target households and industries most in need, only 25% of affordability measures are targeted towards low-income households and most-impacted industries. Since the start of the global energy crisis, governments have also allocated USD 900 billion to short-term consumer affordability measures, additional to pre-existing support programmes and subsidies.Among all measures tracked since 2020, direct incentives for manufacturers aimed at bolstering domestic manufacturing of clean energy now total to around USD 90 billion. The newest outlays identified are predominately aimed at boosting mass and alternative transit modes, low-carbon electricity generation projects and low-carbon vehicle sales. This slowdown may be short-lived, however, as a number of additional policy packages are being considered in the European Union, Australia, Brazil, Canada and Japan. Around USD 130 billion of new government spending to support clean energy investments were announced in the last six months – among the slowest periods for new allocations since the pandemic. Government spending has played a central role in the rapid growth of clean energy investment since 2020, which rose nearly 25% from 2021 to 2023, outpacing growth in fossil fuels in the same period. The June 2023 update of the IEA Government Energy Spending Tracker finds USD 1.34 trillion allocated by governments for clean energy investment support since 2020.Find other reports in this series on the IEA’s Global Energy Transitions Stocktake page. This report is part of the IEA’s support of the first global stocktake of the Paris Agreement, which will be finalized in the run up to COP28, the next UN Climate Change Conference, at the end of 2023. The latest update to the Government Energy Spending Tracker policies database tracks almost 1 600 government financial measures from 68 countries, all of which are available in the IEA’s Policies and Measures (PAMS) database. Short-term energy affordability measures, which are aimed to help shield consumers and industries facing soaring energy prices.Clean energy investment support, including measures to support investment in energy infrastructures, renewables, electrification, efficiency, and supply chains in the energy sector and.The latest update, issued in June 2023, focuses on tracking two types of spending policies: The IEA Government Energy Spending Tracker, formerly the Sustainable Recovery Tracker, provides periodic updates on the latest approved policies and their expected fiscal contributions to energy.
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