With more than a million lives lost so far and no clear exit in sight, the COVID-19 pandemic challenges governments all around the world to their fullest. Besides the public health crisis, the measures necessary to contain the virus have resulted in a global recession that brings additional hardship and suffering. Without any doubt, the events over the past year clearly laid bare our society’s vulnerability to external shocks that governments have insufficiently anticipated and prepared for.
Still, the COVID-19 pandemic is not the only challenge societies face today. A slower, yet more pervasive and harder to mitigate threat is our economies’ on-going contribution to climate change. Because both challenges are inherently linked to how we operate our economies, it makes sense to look for solutions that address both.
As a result of the COVID-19 lockdown measures, economic activities have slowed down markedly. There are periods with fewer cars on the road, fewer flights, and the slower economy results in less energy and goods being shipped around. Because these activities normally produce greenhouse gases, their slow-down also caused a measurable dip in global greenhouse gas emissions and local air pollution. Locked down cities were suddenly quiet, and with clean skies.
However, these reductions are only temporary. As soon as lockdown measures are lifted, people will be using the same cars and the same power plants to provide their electricity. In a recent study, we show that if we simply revert back to old ways of doing things, the impact of COVID-19 lockdowns on climate change would not even be measurable in the real world. A structural change of our economies is needed, and the COVID-19 crisis here presents an opportunity for governments.
Following the economic fall-out of the COVID-19 pandemic, governments are now stepping in with measures to safeguard their public health systems and to put economies back on the rails. The amounts are staggering, with more than USD12 trillion in COVID-19 recovery stimulus announced – about 15% of the combined global gross domestic product (GDP). Reshaping our economies to tackle climate change is often perceived to be extremely expensive, but comparing the investments needed for a green, climate-positive recovery with the announced COVID-19 stimulus we show a quite contrasting picture.
We show that COVID-19 recovery funds dwarf the green energy investment needs for setting the world on track to achieve even the most ambitious 1.5°C limit of the UN Paris Agreement. Over the next five years, the additional green energy investments needed to move the global economy from its current polluting track onto a Paris-compatible path amount to only 12% of the total pledged COVID-19 recovery funding. Combined with divestments from fossil fuels, the net amount becomes of the order of 1% of total COVID-19 recovery funding.
Climate-positive recovery measures bring many things governments are interested in after a crisis: they boost high-quality jobs, can be scaled rapidly, and make a country’s economy more resilient to future shocks. Keeping the bigger picture and a longer-term perspective is thus essential to avoid that our recovery from the COVID-19 pandemic leads our society in the next economic dead end street.