Link to report: Impacts of COVID-19 and recovery packages on climate change mitigation – First results from NAVIGATE
The COVID-19 pandemic, lock-down restrictions and other measures that have been put in place have potentially far reaching implications for inequality within and between countries, for energy demand in different sectors, and for structural change and economic growth. These factors are highly relevant for climate action. In response to the COVID-19 crisis, the EU H2020 funded NAVIGATE project, which aims to improve the capabilities of integrated assessment modelling to support climate policy making, has undertaken rapid responsive research activities in these three areas.
Firstly, we empirically looked at past pandemics to estimate the historical socioeconomic and environmental response in the years after pandemics. Based on five pandemics since 2003, we find significant and persistent increases in inequality, unemployment, and government debt, while GDP levels are about 4 percent below its counterfactual values even after five years. Historically, pandemics also led to substantial reductions in energy demand and emissions, however, most of this decrease has been short-lived and has not led to systemic improvements in the energy system. Projecting those trends out for the COVID-19 pandemic hints to a deeper and more persistent economic shock than presented in the World Economic Outlook and a persistent increase in inequality and poverty.
Secondly, we have tracked the impacts of the pandemic on energy demand, particularly in buildings and transport sectors. Some impacts have proven to be transient – like the dramatic reduction in private vehicle use during lockdowns, but now rebounding as a substitute for public transport. Other impacts may yet to have emerged – like a possible weakening or reversal of urbanisation trends. The NAVIGATE team will continue to monitor these impacts over the next year to inform the next wave of long-term scenario modelling of climate action to achieve EU targets. But the impacts now on energy demand – both for better and for worse – have opened up a critical policy window to prevent backsliding on efficiency gains and progress on low-carbon transition made over recent years.
Thirdly, we have explored the macro-economic impacts of the pandemic and related green recovery packages. We investigate how the shock may affect economic growth, structural change, and emissions. Against this backdrop, we compare proposed and hypothetical recovery packages to analyse the scope for a green recovery. Preliminary results show that large-scale green recovery measures can reduce employment loss and at the same time lead to a persistent substantial drop in emissions, but are not enough to ensure the transition to net emission neutrality by mid-century.
- Johannes Emmerling (RFF-CMCC)
- Kostas Fragkiadakis (E3Modelling)
- Panagiotis Fragkos (E3Modelling)
- Ramona Gulde (PIK)
- Elmar Kriegler (PIK)
- Jean-Francois Mercure (Univ. of Exeter)
- Bas van Ruijven (IIASA)
- Yeliz Simsek (Univ. of Exeter)
- Massimo Tavoni (RFF-CMCC)
- Charlie Wilson (Tyndall Centre for Climate Change Research)