COVID-19 Recovery, Climate Impacts, And Co-Benefits: Stimulus Policies That Can Multi-Solve
Energy Innovation partners with the independent nonprofit Aspen Global Change Institute (AGCI) to provide climate and energy research updates. The research synopsis below comes from AGCI Program Director Emily Jack-Scott , and a full list of AGCI’s quarterly research updates covering recent climate change research on clean energy pathways is available online at https://www.agci.org/solutions/quarterly-research-reviews
The COVID-19 pandemic spurred a global cessation of travel, manufacturing, and countless economic activities. Because our economies are still coupled with the burning of fossil fuels, this markedly reduced greenhouse gas (GHG) emissions. In April, daily emissions fell by as much as 17 percent , and total 2020 emissions may be 7-11 percent lower than 2019 (as projected by the Energy Policy Simulator , and a new opinion piece in Nature by Hanna et al., Figure 1).
Figure 1. Hanna et. al. 2020.
But as many countries’ economic activities have resumed, emissions have quickly begun resurging. And yet, opportunities exist through climate-friendly recovery packages to not only stimulate economies, but also reduce emissions while promoting social and environmental co-benefits. While economic rescue packages were targeted at triaging markets and personal financial impacts on immediate time scales, subsequent recovery packages will hold the key to whether the global response to this pandemic will curb or accelerate climate change in the long-term.
In a May 2020 paper in the Oxford Review of Economic Policy, a team of economists led by Cameron Hepburn led a survey to assess the most climate-friendly recovery policies. They asked 230 experts (senior finance ministry officials, senior central and development bank officials, academic economists, and think tank commentators) from across 53 countries (including all G20 nations), to evaluate stimulus policy frameworks (dubbed “policy archetypes”) for their potential to deliver positive economic and climate results.
The survey evaluated 700 economic recovery policies from 2008-2020 (categorized into 25 archetypes) and their ability to be implemented reasonably quickly, reduce GHG emissions, and provide large economic multipliers (as authors define it the long-term return for every dollar of expenditure). Climate-friendly policy archetypes (see upper right panel of Figure 2) included investments in connectivity infrastructure (S), general R&D spending (X), education (L), clean energy infrastructure (T), and clean energy R&D spending (Y).
Figure 2 Mean survey results of recovery policy archetypes (2008-2020) aggregated using relativity-adjusted scores. From Hepburn et al. 2020.
Other desirable policy archetypes capable of delivering large economic multipliers without exacerbating emissions included healthcare investment (M) and worker retraining (N). Two others with the potential to reduce emissions, but...