Decline in green energy spending might offset COVID-era emissions
benefits
Green energy investments have come to a halt during global crisis

Date:
June 22, 2020
Source:
Yale School of Forestry & Environmental Studies
Summary:
Researchers have documented short-term environmental benefits
during the COVID-19-related lockdown, but that silver lining
could be far outweighed by a long-term decline on clean energy
investments, a new study finds.



FULL STORY ==========================================================================
The short-term environmental benefits of the COVID-19 crisis, including declines in carbon emissions and local air pollution, have been documented since the early days of the crisis. This silver lining to the global
crisis, however, could be far outweighed by the long-term impacts on
clean energy innovation, a new Yale-led study finds.


==========================================================================
The economic downturn triggered by the pandemic, researchers say, could
have a devastating impact on long-term investment in clean energy.

Under a worst-case -- but realistic -- scenario, they predict an
additional 2,500 million metric tons of carbon dioxide -- or the
equivalent of nearly 3 trillion pounds of coal burned -- could be emitted, causing 40 more deaths per month, through 2035.

"This global crisis will certainly defer investments in clean energy,"
said Kenneth Gillingham, an associate professor of environmental and
energy economics at the Yale School of Forestry & Environmental Studies
(F&ES) and lead author of the paper. "Depending on how policymakers
respond, the consequences for human health from this deferred investment
could far exceed the short-term environmental benefits that we have seen
so far." Those short-term benefits have been substantial. Consumption
for jet fuel and gasoline, for example, declined by 50 and 30 percent, respectively, from early March to June 7, while electricity demand fell
by 10 percent. These impacts saved an estimated 200 lives per month
since the lockdowns began.

However, there's also been another, subtler outcome: most investment in
clean energy technologies has come to a halt.



========================================================================== "Overall clean energy jobs dropped by almost 600,000 by the end of
April, as investments in energy efficiency and renewable generation have plummeted," said Marten Ovaere, a postdoctoral researcher at F&ES and
co-author of the paper.

"If that were to continue it could significantly set back the push toward
a clean energy future." The paper, published in the journal Joule,
was coauthored by researchers at MIT Sloan School of Management and Northwestern University.

Drawing on evidence from previous economic shocks, the researchers examine
two possible long-term scenarios in the U.S. In the best-case scenario --
in which the threat subsides relatively quickly, the worst projections
of human fatalities are avoided, and the economy rebounds -- they say
there should be few long-term implications. Most demands for products and services, they predict, "will be deferred rather than destroyed." While
record declines in emissions would be temporary, investments in new
energy solutions would likely reach pre-pandemic levels.

If there is a persistent, long-term recession, however, the impacts on
energy innovation would be significant. While energy use related to travel might remain lower, home energy consumption would increase and commercial building use would stay largely unchanged, particularly if office spaces
are used in a similar way (even if more American workers decide to work
from home). Also, if the public becomes cautious about using public transportation, many commuters will simply decide to drive instead.

The greater impact, however, would be on the energy innovation sector,
the study says. Investment in low-carbon technologies would dry up, the transition to cleaner vehicle fleets would be disrupted, and cash-strapped automakers would abandon new vehicle and energy efficiency technologies.



==========================================================================
"For example, there has been a huge amount of investment going into
electric vehicles," Gillingham says. "But if companies are just trying
to survive, it's much less likely that they can make large investments
towards new technologies for the next generation because they don't even
know if they're going to make it to the next generation." In addition,
tighter state and local budgets over the next few years will likely
deflate much of the investment in clean-energy options.

Even if green energy investments stall for just a single year, the authors calculate, it would outweigh any emissions reductions that occurred from
March to June.

However, while the uncertainty of this crisis poses potentially enormous threats, it also presents an opportunity, Gillingham says. If federal governments produce large stimulus packages to strengthen the economy,
even modest investments in clean energy technologies would pay long-term dividends.

"Including a green component in those stimulus packages would be
an investment in the future, but it also has short-term benefits,"
he says. "We looked back at analyses of the clean energy investments
that were part of the American Recovery and Reinvestment Act of 2009 --
which promoted new energy infrastructure, smart meters, and other new technologies -- and it made a big difference.

"So it really is very much in the hands of policymakers whether green
energy is held back or accelerated by this crisis."

========================================================================== Story Source: Materials provided by Yale_School_of_Forestry_&_Environmental_Studies. Original written by
Kevin Dennehy. Note: Content may be edited for style and length.


========================================================================== Journal Reference:
1. Kenneth T. Gillingham, Christopher R. Knittel, Jing Li, Marten
Ovaere,
Mar Reguant. The Short-run and Long-run Effects of
Covid-19 on Energy and the Environment. Joule, 2020; DOI:
10.1016/j.joule.2020.06.010 ==========================================================================

Link to news story: https://www.sciencedaily.com/releases/2020/06/200622182208.htm

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