A short report by The Economist Intelligence Unit
Economic crises present an opportunity for governments to take action on climate change.
The lockdown responses to the COVID-19 pandemic have led to a fall in emissions—global CO2 emissions are expected to be about 8% lower in 2020 than in 2019, in line with the required 7.6% reduction needed each year through 2030 to keep temperature increases below 1.5°C, compared with pre-industrial levels.
While the impact of lockdowns on climate has been positive, the impact on the economy has not—The Economist Intelligence Unit (EIU) forecasts global output to contract by 5% this year.
However, in the fight to regain economic growth, progress on lowering emissions must not be lost: as policymakers develop economic recovery packages, they must target policies that prioritise both climate change and economic growth.
Energy efficiency policies—even on just a national scale—have significant scope to reduce emissions. A 2014 study by The Economist assessed policy options on their ability to reduce emissions.
While global treaties, global shifts in energy production and China’s one-child policy achieve the greatest reductions, energy efficiency policies featured most frequently (see rows highlighted in blue in the chart below).
The inclusion of energy efficiency policies within stimulus packages would have a tangible impact on reducing emissions. And that impact would be accompanied by economic growth.
Policies such as improving industrial energy efficiency, retrofitting buildings and rolling out more efficient household appliances can create jobs, stimulate additional spending in the economy and be implemented quickly and easily.