The economic imperative: Recession and social injustice imperil the energy transition

ENERGY FLUX 💡 | When the economy booms, so do anthropogenic emissions of climate-warming gases. This year, the inverse happened.

The pandemic plunged the global economy into its most severe contraction since the Great Depression. Energy-related emissions, which were on a hockey-stick trajectory until 2019, were slammed into reverse and are on track to be 7% lower in 2020 than last year. The IMF last week forecast the global economy will shrink by 4.4% this year.

Energy-related CO2 emissions were 33 gigatonnes in 2019, so a 7% reduction would equate to carbon savings of 2.31 gigatonnes (where a gigatonne is a billion tonnes). Global GDP was worth USD 135.7 trillion last year, as per the World Bank, so a 4.4% contraction equates to USD 5.6 trillion. Therefore, the implicit economic cost of that 7% carbon saving equates to USD 2,424 per tonne of CO2, according to my rough calculations.

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