Dive Brief:

• Impacts of the new coronavirus pandemic (COVID-19) could lead to a near 8% drop in global greenhouse gas (GHG) emissions in 2020, according to a report from the International Energy Agency (IEA).
• Global energy demand is expected to drop 6% this year, due to both the coronavirus and to countries seeing warmer-than-average winters. That 6% decline is seven times higher than the drop brought by the 2008 financial crisis. Alongside that decline in energy demand, IEA predicted demand for coal could fall by 8%, while oil will also see a downturn. But renewable energy sources may see an uptick in demand.
• IEA said emissions are likely to rise again once economies reopen and recover, unless countries try to invest in clean energy and renewables. In a tweet, IEA Executive Director Fatih Birol called for "structural emissions reductions."

Dive Insight:

A strong connection has been established between coronavirus-related policies like social distancing and shelter-in-place orders and the improving climate, but this IEA report is one of the first to quantify just how impactful the pandemic could be on emissions. However, it is not all good news: if the worst impacts of climate change are to be avoided, the United Nations said emissions must be cut that much each year to limit temperature rises to 1.5 degrees Celsius.

And the report notes that emissions and energy demand could creep back up if lockdowns are shorter, with the drop in energy demand only limited to 3.8% in that instance. But if a second wave of infection comes about because of restrictions being lifted too soon or if the recovery is slow, that demand in energy could drop even further by the end of the year, according to the report. Renewables are "the only energy source likely to experience demand growth across the remainder of 2020," the report said. 

In the United States, there has already been plenty of support for using a future stimulus package in Congress as a vehicle for infrastructure investment, including efforts to withstand the effects of climate change. Those plans might be uphill sledding: Axios reported there is reluctance among many Congressional Republicans to spend more federal dollars on infrastructure in a new spending package.

"If we've got to rebuild our infrastructure, let's rebuild it in a way that's resilient, for severe climate events," Rep. Peter DeFazio, D-OR, said during a conference call hosted by House Democrats in early April. "Let's rebuild it with new materials that are less carbon intensive. Let's rebuild it in a way so that we move away from fossil fuel dependence in transportation. If you've got to rebuild it, rebuild it the right way. This is an investment we have to make."

There is already some precedent for greener spending in stimulus packages, albeit to a more limited extent. During an early April webinar hosted by the World Resources Institute (WRI), Helen Mountford, the group’s vice president for climate and economics, noted the world spent $400 billion on green infrastructure in stimulus packages after the 2008 financial crisis.

South Korea led the way as 80% of its stimulus money went into green initiatives, and Mountford said the subsequent rebound in GDP growth came partly from those investments. "We know and understand much better the risks of coming out of this COVID-19 crisis, and we need to ensure we build resilience for the future, including climate-wise," Mountford said.

The drop in demand will be especially challenging for energy providers, who were already looking for ways to diversify their income streams even before the pandemic.