Beyond the immediate impact on health, the current Covid-19 pandemic crisis has caused widespread global recession by months-long restrictions on mobility and social and economic activity, and it looks like the recovery from the depths of the lockdown recession will be slow. The International Labour Organization warns that hundreds of millions of people could be left without work.
The International Energy Agency considers that the impact of Covid‑19 on global energy demand in 2020 would be more than seven times greater than the impact of the 2008 financial crisis. Global energy demand fell by 3.8% in the first quarter of 2020; coal by almost -8%, oil nearly -5%, gas around -2% and also electricity demand has been significantly reduced as a result of lockdown measures. Renewables were the only source that posted a growth in demand, driven by larger installed capacity and priority dispatch. However, without additional policy measures the post-Covid situation is challenging for the green transition – lower energy demand and fossil prices may slow new carbon-free investments.
Global CO2 emissions are expected to decline by 8% in 2020, 2.6 gigatonnes (Gt) – the highest reduction ever and six times greater than the previous record reduction of 0.4 Gt in 2009. As after previous crises, however, the rebound in emissions may be larger than the decline, unless the wave of investment to restart the economy is dedicated to low-carbon infrastructure.
Climate Leadership Coalition views that the Covid-19 pandemic is no reason to slow the European Green Deal but rather the opposite. The Green Deal should be at the centre of the EU’s recovery efforts. CLC proposes that the EU and its member countries
- use carbon prices to promote the competitiveness of existing and new CO2-free energy and prevent the potential adverse impacts of low fossil prices – income can also be used to finance the green recovery,
- strengthen demand for clean solutions and create demand for new ones e.g. blending quotas or contracts for differences for low carbon products (low-carbon liquid fuels, gases materials, etc.) and references to CO2-footprints in procurement. Public authorities should be encouraged to purchase these low-carbon products,
- accelerate the development of new solutions for the use of electricity and electricity- and bio-based fuels, chemicals and materials in the industry and transport, as well as the development of nature-based solutions and new ways to produce food,
- improve the infrastructure – power grid, enabling large scale direct and indirect electrification, and digital infrastructure software, fibre and wireless networks – for teleworking, the circular economy and industrial efficiency, and
- invest in improving the skills in the Green Deal focus areas – International Labour Organization estimated that by 2030 the low-carbon transition could increase jobs in the EU by 2 million compared to a business as usual case.
Green recovery and the Green Deal are good opportunities to improve our trade balance – increase jobs, reduce external fossil costs and create new businesses while reducing greenhouse gases in parallel.
More information: Jouni Keronen, CEO, CLC +358 50 4534881 (jouni.keronen at clc.fi)