A 1% investment of global GDP would significantly cut emissions

  • A 1% global GDP investment could reduce global CO2 emissions by 6 to 8.5% by 2030, a green recovery investment scenario shows.
  • Recovery packages should focus on accelerating the transition toward low-carbon energy production and improving energy efficiency, researchers found.
  • Sustained and ambitious low-carbon investment programs, combined with strong climate policies to limit fossil fuels, are the only way to meet the Paris Climate Agreement targets, they say.

A novel green recovery investment scenario has shown that a 1% global GDP investment could reduce global CO2 emissions by 6 to 8.5% by 2030. The researchers demonstrated that even a temporary stimulus package could potentially achieve a long-lasting reduction of CO2 emissions from energy. production and industrial processes.

The Covid-19 pandemic not only caused a global health and economic crisis but also significantly reduced global CO2 emissions in 2020 by 6 to 7%, compared to 2019. To recover economically, many governments worldwide have invested in recovery plans to stimulate the economy and support employment. The recovery measures, however, could affect emissions for years to come.

In a study published in Frontiers in Climate, researchers from The Netherlands Environmental Assessment Agency demonstrated that if recovery packages would focus on accelerating the transition toward low-carbon energy production and improving energy efficiency in industry, this could be a significant boost toward reaching the targets of the Paris Climate Agreement. The lead author, Dr Ioannis Dafnomilis, explained:

“After successfully analyzing the results of the pandemic on global emissions in a previous modeling study, we thought it would be an interesting exercise to investigate the possible effects of a targeted economic recovery focused on ‘green’ measures and policies. At that time, governments had announced numerous recovery measures, but the focus was mostly on economic recovery in general. “

“To our knowledge, we are still the only scientific team to investigate a green recovery from Covid using a multi-model approach.”

Our planet is straining under the burden of a global population of nearly 8 billion people.

The World Economic Forum’s Center for Nature and Climate accelerates actions on climate change and environmental sustainability, food systems, the circular economy and value chains, and the future of international development.

  • Through the Global Plastic Action Partnership, we are bringing together government, business and civil society to shape a more sustainable world through the eradication of plastic pollution.
  • The center is championing Nature-Based Solutions. Global companies are working together through the 1t.org initiative to support 1 trillion trees by 2030. Since September 2021, over 30 companies have committed to conserve, restore and grow more than 3.6 billion trees in over 60 countries.
  • Through a partnership with the US Special Presidential Envoy for Climate John Kerry and over 30 global businesses, the Forum is encouraging companies to join the First Movers Coalition and invest in innovative green technologies so they are available for massive scale-up by 2030 to enable net. -zero emissions by 2050 at the latest.
  • The center is also bringing leaders together to make commitments to a circular economy approach. Globally, the Scale360 ° initiative will reduce the environmental impact of value chains within the fashion, food, plastics and electronics industries – a significant step in making the $ 4.5 trillion circular economy opportunity a reality. The African Circular Economy Alliance is funding circular economy entrepreneurs and circular economy activities in countries including Rwanda, Nigeria and South Africa. In China, the Forum’s Circular Electronics in China project is helping companies reduce and recycle 50% of e-waste by 2025.
  • The Forum is also crowdsourcing solutions to the climate crisis through its open innovation platform, UpLink. Since 2020 this digital space has welcomed over 40,000 users who are working on over 30 challenges including reducing plastic ocean pollution, scaling efforts to conserve, restore and grow 1 trillion trees and innovating the production and processing of aquatic foods.

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Reducing CO2 emissions

The researchers aimed to go beyond previous works by providing a comprehensive analysis, considering the energy use, economic and emissions impacts of both the Covid-19 pandemic and potential green recovery packages using well-established models. To do this, Dafnomilis and his team focused on investments in areas that directly supported emissions reduction in energy production and industrial processes, modeling an investment plan over three years.

The results show that even a temporary stimulus package can potentially achieve long-lasting reduction of CO2 emissions by driving the low-carbon transition in crucial energy, transport, and industry sectors.

“The share of renewables in total electricity generation is projected to increase, uptake of electric vehicles is accelerated, and energy savings in industry and building sectors lead to additional emission reductions. Our findings showcase the multiple benefits a green recovery stimulus can have, in terms of minimizing CO2 emissions from energy production and industry and upscaling low-carbon technologies, ”said Dafnomilis.

A strong green recovery program

The researchers highlighted it is important to note, however, that an investment increase into low-carbon technologies of only three years is not enough to change the global emissions trajectory on its own:

“A sustained and ambitious low-carbon investment program, combined with strong climate policies to limit consumption and production of fossil fuels is the only way to meet the targets of the Paris Agreement. These green recovery packages need to be embedded in each country’s development to maximize sustainability and socio-economic benefits. “

Dafnomilis hopes that further research into green recovery models can help governments to produce tailor-made recommendations for specific countries, paving the way to support further policymaking to support a low-carbon transition.


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