The geopolitical and geo-economic forces wrought by the coronavirus pandemic are likely to slow the transition to a more sustainable global energy mix. Fortunately, the pandemic has also resulted in governments gaining vastly greater influence over whether this shift stalls or accelerates.
To push ahead, governments will need to go beyond simply devoting stimulus funds to cleaner energy, however welcome that is. Ultimately, policies will be more important than government spending in creating an environment in which all actors have sufficient incentive to advance the energy transition.
Such government activism seems more plausible than ever before. The COVID-19 crisis has generated conversations and actions that would have seemed fanciful just six months ago. The contraction of economies around the world and the swelling ranks of the unemployed have necessitated stimulus packages of unprecedented scale. Low interest rates have, for the moment, silenced most voices opposing new governmental debt, and a window for trillion-dollar spending initiatives has opened.