Abstract
Part of the economic recovery plans implemented by governments following
COVID-19 is directed towards the energy transition. To understand the
potential effects of these post-COVID green recovery packages on
reductions of greenhouse gases emissions, we investigated three
different approaches. Firstly, we analysed simulation results of
Integrated Assessment Models (IAMs) to infer the change in CO2 intensity
of GDP that could result from post-COVID low-carbon investment plans.
Secondly, we investigated the scenarios provided by the International
Energy Agency (IEA) based on a bottom-up energy system model. By
combining the two approaches, we found that green recovery packages
implemented and planned globally can lead to an emission reduction of
merely 1%-6% from 2030 baseline levels at most. Thirdly, we looked
into the results of the Adaptative Regional Input-Output model, which
simulates the dynamic effects of economic crisis and fiscal stimuli
through supply chains following labour shortage. The third approach
shows that the increase of activity driven by fiscal stimuli leads to a
rebound of CO2 emissions even if they do not target carbon-intensive
sectors. We conclude that green recovery packages targeting low-carbon
technologies have a limited impact on near-term CO2 emissions and that
demand-side incentives, as well as other policy efforts to
disincentivise the use of fossil fuels, are also important for scaling
up climate mitigation.