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New PARIS REINFORCE study on emissions and employment trade-offs from COVID-19 green recovery spending
On 16 September 2022, a new project study was published in One Earth (van de Ven et al., 2022), evaluating optimal cleantech COVID-19 recovery packages in six major economies (Canada, China, EU, India, Japan, USA). Specifically, the study quantifies the extent to which these cleantech elements of the recovery packages can create energy-sector employment and further reduce emissions at the same time, as well as evaluates trade-offs between these objectives.
Our study uses three of the project's integrated assessment models (IAMs), GCAM, TIAM, and GEMINI-E3, to understand how each modelling approach affects outcomes. Portfolio analysis is then applied to the model outputs in order to find portfolios of clean energy supply technologies that can optimise emissions cuts with near- and long-term employment gains.
Results suggest that green recovery plans should allocate at least 50% of funds to solar power production, to obtain reductions in CO2 emissions and increase job gains. Similarly, countries should invest over 10% of their recovery funding in onshore wind, while investments in other clean energy technologies strongly depend on the country, preferred objective, and model applied (Figure 1).
In terms of differences between countries, we see far more significant employment gains and emissions reductions in the EU and China, than in any other examined region (Figure 2). In contrast, modelled packages are too small to make a difference in India and the US. Of the 16 region-model combinations in this study, only one (Japan with TIAM) led to a decrease in employment, indicating that, in most cases, green portfolios can help achieve both emissions reductions and job gains.
Results also show that different technologies should be prioritised depending on whether the main focus of the policy is on emissions reductions or employment goals. While employment creation is often high on the political agenda in times of crisis, it is important for policymakers to carefully weigh the importance and impact of both objectives (as well as other ones not considered in this study) and ensure that the impact of recovery packages is beneficial for both objectives rather than inflationary.
The large differences obtained across the three models imply that there is large uncertainty in the extent, to which green investments could achieve emissions cuts. Since none of the models can be objectively classified as better or worse for these types of analyses, model diversity should be seen as an important prerequisite to capturing the entire solution space of a specified policy issue, while a lack of such diversity may give a false sense of precision.
You can read the full article (open access) here:
van de Ven et al. (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.