The COVID-19 crisis could mark a turning point in progress on climate change.This year, global greenhouse gas (GHG) emissions will fall by more than in any other year on record. However, emissions will rebound once mobility restrictions are lifted and economies recover, unless governments intervene. There are reasons to fear that we will leap from the COVID frying pan into the climate fire.

This paper identifies stimulus policies that are perceived to deliver large economic multipliers, reasonably quickly, and shift our emissions trajectory towards net zero. The recovery packages can either kill these two birds with one stone – setting the global economy on a pathway towards net-zero emissions – or lock us into a fossil system from which it will be nearly impossible to escape

For this research, they surveyed 231 central bank officials, finance ministry officials, and other economic experts from G20 countries on the relative performance of 25 major fiscal recovery archetypes across four dimensions: speed of implementation, economic multiplier, climate impact potential, and overall desirability. They identified five policies with high potential on both economic multiplier and climate impact metrics: clean physical infrastructure, building efficiency retrofits, investment in education and training, natural capital investment, and clean research and development (R&D).

In lower- and middleincome countries (LMICs) rural support spending is of particular value while clean R&D is less important. These recommendations are contextualised through analysis of the short-run impacts of COVID-19 on greenhouse gas curtailment and plausible medium-run shifts in the habits and behaviours of humans and institutions.

Published by the Oxford Smith School of Enterprise and the Environment, and authored by Cameron Hepburn and colleagues, this paper is intended to promote discussion and to provide public access to results emerging from their research.

Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?