In a report published on Monday, analysts from Climate Action Tracker warned that the economic consequences of the public health crisis made future carbon emissions “very uncertain” with the design of recovery plans crucial in shaping long-term pathways and determining whether the world can limit global heating to 1.5°C. “Economic recovery and stimulus packages for Covid-19 present an opportunity for governments to ramp up climate ambition and action,” the authors said.
Total emissions from energy and industry are expected to fall in the range of 4-11% over 2020, and next year 1% above to 9% below 2019 levels. However, the report warned against a “short-sighted” view of such emissions reductions as positive for the climate, noting that post-crisis emissions are dependent on the mode of recovery. Following the 2008-09 financial crisis emissions quickly returned to the pre-crisis trend.
The diversion of investment from decarbonisation to the Covid-19 response is also a risk to emissions reductions, the report warned.
The analysis, the product of collaboration between Climate Analytics and New Climate Institute, modelled the impact on emissions intensity of GDP by 2030 of five policy response scenarios under two economic recovery pathways. An “optimistic” recovery assumes the pandemic has no long-term effect on global GDP growth, with a 33% increase in 2030 compared with 2019, while a “pessimistic” recovery sees global GDP increase by 19% in 2030 compared with last year.
A “rebound to fossil fuels” investment scenario would result, even with lower growth, in a “significantly higher” emissions than Climate Action Tracker’s pre-Covid-19 estimates for 2030.
Continuing with current trends for low carbon energy investment of around 1.1% of GDP a year with an optimistic recovery, emissions would reach a similar level as projected pre-Covid-19 under current policies, around 56Gt/yr, while under a pessimistic recovery would reach a similar level estimated pre-Covid-19 for Paris Agreement commitments, around 50Gt/yr.
Under three green recovery scenarios with increased investments in low carbon energy, emissions reductions are “strongly” related to the scale of the stimulus, the report said. The green recovery scenarios all involve switching from fossil fuels to increase green energy investments, and do not entail massive increases in investment overall. The strongest green stimulus, with an increase in green investment of 1.2%, would see emissions of 24-27Gt/yr. The pathway to limit heating to 1.5°C required emissions in 2030 to reach 26Gt/yr.
The authors concluded that the “level of economic of recovery from Covid-19 is secondary to the speed and degree to which that activity transitions towards carbon neutrality”.
Follow-up: CAT report