Long-term impacts of COVID-19 on carbon emissions and the Paris Agreement

Abstract:

Lockdown measures to contain COVID-19 have led the global economy into one of its most severe recessions. The economic impact of COVID-19 and lockdown policies will be amplified via the ripple effects through global supply chains, and most likely continuing throughout the coming years. Pandemic and lockdown policies not only affect production activities and people’s consumption patterns and lifestyles but also lead to substantial changes in energy consumption and CO₂ emissions. In this study, in addition to global impacts, we will specifically focus on effects on the economy of lockdown and recovery measures and associated emissions over the period of 2020 to 2024 in Asian countries and their role in global supply chains. Our newly developed economic impact model estimates emissions from 65 economic sectors in 79 countries (including 18 Asian countries). The results show that dependent on the scenarios global emissions would potentially decrease by between 5.1% and 17.1% from 2020 to 2024, compared with the baseline scenario without the pandemic. We show the global economic interdependencies of production and consumption under COVID-19 and find that by extending the duration and increasing the strictness of the lockdown in one country, emissions from other countries will decrease even if their lockdown policies were unchanged. The substantial declines in emissions due to COVID-19 and associated lockdown policies inadvertently help achieve climate change goals. However, the emission decline due to COVID-19 might be partly neutralized by follow-up fiscal stimuli. Ongoing stimulus plans could increase global emissions by 0.96 GT (0.8% of the scenario without fiscal stimuli) to 3.4 GT (2.9%), depending on the strength of fiscal incentives. Therefore, we have to move beyond just harnessing the windfall gains from COVID-19 and turn this crisis into an engine for climate action through linking economic recovery plans explicitly and strongly to restructuring and decarbonizing the global economy.