How COVID-19 recovery efforts will impact climate goals

In 2020, the COVID-19 pandemic initiated a record drop in greenhouse gas emissions of an astonishing seven per cent. To put this into perspective, a seven per cent decline approximately compensates for the past ten years of global emissions increases, and this decrease is seven times greater than the decline which followed the 2008-09 financial recession. 

However, such declines are not necessarily long lasting: during the 2008-09 financial recovery, global emissions spiked significantly and quickly reversed any benefits from the initial drop. Given that the current decline is not a result of innovation or climate-friendly policies but the direct consequence of a devastating halt to the global economy, COVID-19 economic recovery efforts could spur a similar increase in greenhouse gas emissions. While this would eliminate the benefits derived from the present emissions decline, there is hope that climate-friendly policies may be on the horizon. An interview with Fatih Birol of the International Energy Agency, recent pledges by world leaders, and a shift towards climate change-friendly investment portfolios all indicate a growing, global push towards sustainability that is buttressed by the increased awareness and urgency from the public.

According to Birol, the keys to avoiding a spike in emissions during the COVID-19 recovery lie in  government and company policies. When asked about the prospects of reaching the goal of a global temperature increase under two degrees Celsius, Birol points to four factors that indicate this goal is actually within reach. First is the falling cost of solar and offshore wind energy to the point where—for some regions—solar is now one of the cheapest sources of electricity. Second is the low interest rates that many central banks are setting, which may incentivize investment into clean energy technologies. Third is the growing number of commitments from governments and companies to contribute to combatting the climate crisis. And finally,, the increasing pace of innovation means technologies like carbon capture and storage and green hydrogen production will soon be available as an economically viable option on a wide scale.  

Any progress made towards global emissions reductions will require the cooperation and support of the world’s two largest economies: China and the United States. Given the significant economic influence of the U.S., President Trump’s decision to pull out of the Paris Climate Agreement does not bode well for emission reductions. However, the U.S. led the world in emission reductions in 2019 and 2020, as a result of the replacement of coal by solar, wind, and natural gas in many states. Additionally, President-Elect Joe Biden has said that under his presidency, the United States would achieve net-zero greenhouse gas emissions by 2050, and rejoin the Paris Agreement. A similar pledge was made by Chinese leader Xi Jinping, who has committed to carbon neutrality by 2060. These commitments have been echoed in other countries as well, with Japan’s new prime minister, Suga Yoshihide, promising net-zero emissions by 2050. While these public commitments to global emissions reductions represent a critical step in the right direction, specific plans on how to achieve them have not yet been released by any of these countries. 

Another indication that the world is headed in a more sustainable direction is the rise in climate-friendly investment portfolios, an apparent response to the COVID-19 pandemic. According to a survey by RBC Global Asset Management, “the pandemic has led more than a quarter of professional investors to place more importance in ESG [Environmental, Social, and Governance] considerations.” One of the most prominent examples of this is the Cambridge University Endowment Fund’s recent announcement that all direct and indirect investments in fossil fuels will be removed from its portfolio by 2030. The fund also promises that by 2038, all companies included in the investment portfolio will have net-zero emissions. This decision was motivated by student action. Cambridge was experiencing criticism over its links to less-than-climate-friendly companies like BP, ExxonMobil, and Shell. After numerous protests, hunger strikes, and petitions by Cambridge Zero Carbon, student activists finally declared a “historic victory.” 

These recent developments are hopeful signs that the world is moving towards more sustainable practices, and that COVID-19  economic recovery does not have to coincide with a spike in greenhouse gas emissions. Such a spike would set back climate progress for years to come. Although climate change is classified as a slow-moving disaster, we do not have time to waste—action must be taken now to prevent its worst impacts. Thus, widespread awareness is critical. The pledges of world leaders and prominent investors would not have occurred without a strong push by the public to take a stand against climate change. As citizens continue to use their voices for the environment, commitments by governments and the private sector will increase, along with the rate of innovation and adoption of climate-friendly technologies. 

However, should their voices grow silent, any progress made can easily be reversed.