Different shades of green: our new study on emissions and employment trade-offs from green recovery packages among major economies
A low-carbon transition is urgently needed to meet the 1.5°C Paris climate targets. The COVID-19 pandemic, however, has imposed widespread economic burdens. Among others, countries have seen big investment and employment losses due to the pandemic, which have hindered the recovery and development of many sectors, including clean energy.
Nonetheless, there is an opportunity to combine post-pandemic recovery packages with green growth aspirations. Major CO2 emitters such as China, the US, and the EU have launched green recovery plans, committing to invest in clean energy technologies. These plans are encouraging, but the extent to which investments can be managed to ensure both greenhouse gas emissions cuts and green job growth—given varying socioeconomic conditions—remains unclear.
A new study by PARIS REINFORCE, published in One Earth (link), attempts to shed light on this issue by evaluating optimal cleantech COVID-19 recovery packages in six regions (Canada, China, the EU, India, Japan, and the USA). We use three integrated assessment models (GCAM, TIAM, and GEMINI-E3) and soft-link them with a portfolio analysis framework, aiming to find portfolios of clean energy supply technologies that can optimise not only emission cuts, but also near- and long-term employment gains.
Our estimates suggest that green recovery plans would benefit from as high as 50% of funds flowing towards solar power production, to optimise reductions in CO2 emissions and increase energy-sector job gains. Similarly, countries should invest over 10% of their recovery funding in onshore wind, while optimal investments in other clean energy technologies strongly depend on the country, preferred objective, and model applied (see the figure below).
Technology mix of portfolios maximising each objective per model-country combination.
Among the six regions, the EU and China see the most significant employment gains and emissions reductions. For China, optimal allocation of recovery funds in a clean energy portfolio can cut up to two times the CO2 emissions gap of the country’s 2030 NDC target, while covering up to 22% of the jobs lost due to COVID-19. For the EU, optimal recovery spending could help approach the -55% CO2 emissions target in 2030 by up to 48%, while mitigating the pandemic-related job losses by up to around 9% by the end of the decade. In contrast, packages in the rest of the countries are measured to contribute significantly less, especially in the US and India, also considering the amount of their (green) recovery spending
It should be noted that our diverse set of models gives a wide range of quantified impacts.
Feel free to read the full article here (open access):
van de Ven, D.-J., Nikas, A., Koasidis, K., Forouli, A., Cassetti, A., Chiodi, A., Gargiulo, M., Giarola, S., Köberle, A.C., Koutsellis, T., Mittal, S., Perdana, S., Vielle, M., Xexakis, G., Doukas, H., & Gambhir A. (2022). COVID-19 recovery packages can benefit climate targets and clean energy jobs, but scale of impacts and optimal investment portfolios differ among major economies. One Earth, 5(9), 1042-1054. https://doi.org/10.1016/j.oneear.2022.08.008
As of today, 73 scientific publications have been produced in the context of the PARIS REINFORCE project; you may browse them here.