Impacts of COVID-19 and fiscal stimuli on global emissions and the Paris Agreement

Yuli Shan, Jiamin Ou, Daoping Wang*, Zhao Zeng, Shaohui Zhang, Dabo Guan, Klaus Hubacek*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

The global economy is facing a serious recession due to COVID-19, with implications for CO2 emissions. Here, using a global adaptive multiregional input-output model and scenarios of lockdown and fiscal counter measures, we show that global emissions from economic sectors will decrease by 3.9 to 5.6% in 5 years (2020 to 2024) compared with a no-pandemic baseline scenario (business as usual for economic growth and carbon intensity decline). Global economic interdependency via supply chains means that blocking one country's economic activities causes the emissions of other countries to decrease even without lockdown policies. Supply-chain effects contributed 90.1% of emissions decline from power production in 2020 but only 13.6% of transport sector reductions. Simulations of follow-up fiscal stimuli in 41 major countries increase global 5-yr emissions by -6.6 to 23.2 Gt (-4.7 to 16.4%), depending on the strength and structure of incentives. Therefore, smart policy is needed to turn pandemic-related emission declines into firm climate action.

Global emissions could decrease 3.9-5.6% over 5 years due to COVID-19, and the interconnected economy means lockdown-related declines reach beyond borders. As countries look to stimulate their economies, how fiscal incentives are allocated and invested will determine longer-term emission changes.

Original languageEnglish
Number of pages10
JournalNature climate change
Early online date22-Dec-2020
DOIs
Publication statusPublished - 22-Dec-2020

Keywords

  • INPUT-OUTPUT
  • ASSESSMENT MODEL
  • DISASTER IMPACT
  • CO2 EMISSIONS
  • SUPPLY-CHAIN

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