This report assesses the implications of the COVID-19 pandemic and associated recovery measures on emissions out to 2030 and global emission pathways towards meeting the Paris climate goals (‘what-if’ scenarios). Furthermore, the study reviews the most recent insights published in the literature on post-COVID emissions projections and green recovery trajectories, and provide a framework for analysing the ‘greenness’ of recovery packages, using Germany as a case study.

Main Findings:

This report assesses the implications of the COVID-19 pandemic and associated recovery measures on emissions out to 2030 and global emission pathways towards meeting the Paris climate goals (‘what-if’ scenarios). For the longer term, this study's ex-post calculations indicate a global emission reduction in 2030 of –2.5 to –4.5 GtCO₂e (–4% to –7%), compared to pre-COVID current policy projections, for IMF’s Baseline and Longer and New Outbreak scenario, respectively. These numbers are based on IMF’s (April 2020) GDP projections for 2020-2024 and model decarbonisation rates. However, in case of a rebound to fossil fuels, with lower decarbonisation rates, the emission reduction in 2030 is projected to be smaller (–3.0 instead of –4.5 GtCO₂e in the Longer and New Outbreak scenario) or may even turn into an increase (+0.5 instead of –2.5 GtCO₂e in the Baseline scenario).

Figure 1. Global total greenhouse gas emissions (median estimates) in the current policies scenario for 2010-2030, for various scenarios related to the COVID-19 pandemic.

Based on data and projections of the IEA and Global Carbon Project published in April and May 2020, the report median estimate for the global CO₂ emission reduction in 2020, compared to 2019 levels, is –8% in case of prolonged lockdowns worldwide until the end of 2020, and –4% to –5% if lockdowns are shorter and Europe and North America recover faster in the second half of 2020. At this point, the COVID-19 pandemic is expected to have little effect on estimates of the 2030 GHG emission levels consistent with a least-cost pathway in line with the Paris Agreement goals, as the 2020 drop in emissions is not due to structural changes. While the CO₂ emissions reduction in 2020 is probably unprecedented, a consistent, similar rate of decrease would need to be maintained for decades in order to achieve the 1.5 °C warming limit. Low-carbon development needs to play a key role in countries’ recovery strategies to avoid that emissions. Furthermore, the study reviews the most recent insights published in the literature on post-COVID emissions projections and green recovery trajectories, and provide a framework for analysing the ‘greenness’ of recovery packages, using Germany as a case study. Assessing the effect of the fiscal stimulus packages announced by governments in response to the pandemic requires an in-depth analysis of individual measures. To this end, we propose a classification defining ‘green’, ‘grey’ and ‘colourless’ measures (both sector-specific and economy-wide). Besides tracking incoming economic recovery packages, attention should focus on how to account for the environmental effects of additional rescue measures such as airline bailouts, how to include non-budgeted measures, and how to account for regulatory roll-backs.

Figure 2. Economic recovery measures in Germany’s fiscal stimulus package of 3 June 2020, classified by 'colour type' and sector.[/caption]

Using the classification method mentioned above, a pilot assessment of the €130 billion fiscal stimulus package announced by the German government on 3 June 2020 reveals that ‘green’ recovery measures account for approximately 31% of this stimulus. While the package does not contain unambiguously ‘grey’ measures, some measures currently coded as ‘green’ or ‘colourless’ may require further assessment once more information becomes available. Approximately 21% of the package is in line with the green measures defined by IEA’s Sustainable Recovery Plan.