- The IEA Chief Economist issued a stark warning this week that the global economy could be hit with another recession triggered by escalating crude oil prices.
Following on a warning from Fatih Birol, the International Energy Agency’s chief economist, that world crude prices are threatening the global economy, the Global Renewable Fuels Alliance (GRFA) is calling on the G20 to enact aggressive biofuels policies that reduce our crippling reliance on crude oil.
The IEA chief economist issued a stark warning this week that the global economy could be hit with another recession triggered by escalating crude oil prices. High oil prices have preceded every global recession since the early 1970’s with the most recent economic collapse in 2008 being preceded by record-breaking crude oil prices that topped $147.50 per barrel.
According to the GRFA, world biofuels production is currently contributing over 1 million barrels of oil equivalent to global energy supplies. The GRFA expects global production to grow by approximately 3% this year without any significant policy changes.
“We must do more to encourage the development of alternatives to crude oil such as ethanol and biodiesel. The IEA has stated that by 2050, biofuels could produce 27% of the world’s transport fuels,” said Bliss Baker, spokesperson for the GRFA.
The Organization of Petroleum Exporting Countries (OPEC) has publicly acknowledged that "energy efficiency policies along with the use of biofuel will put more downward pressure on oil consumption worldwide."
According to the GRFA the recent rise in crude oil prices will be particularly hard on underdeveloped countries that are net importers of crude oil. When crude prices rise even slightly, the impact on the balance of trade of these countries is devastating. Today, 38 of the 47 poorest countries on earth are net importers of crude oil. Of those 38 countries, 25 import all of their crude oil requirements.