Editing IPCC:AR6/WGIII/Chapter-1 (section)

=== Cross-Chapter Box 1 | The COVID-19 Crisis: Lessons, Risks and Opportunities for Mitigation ===

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'''Authors:''' Diana Ürge-Vorsatz (Hungary), Lilia Caiado Couto (Brazil), Felix Creutzig (Germany), Dipak Dasgupta (India), Michael Grubb (United Kingdom), Kirsten Halsnæs (Denmark), Şiir Kılkış (Turkey), Alexandre Köberle (Brazil/United Kingdom), Silvia Kreibiehl (Germany), Jan Christoph Minx (Germany), Peter Newman (Australia), Chukwumerije Okereke (Nigeria/United Kingdom)

The COVID-19 pandemic triggered the deepest global economic contraction as well as CO 2 emission reductions since the Second World War ( [[#Le%20Quéré--2020|Le Quéré et al. 2020]] b), (AR6 WGI, Box 6.1) ( [[IPCC:Wg3:Chapter:Chapter-2#2.2.2.1|Section 2.2.2.1]] ). While emissions and most economies are expected to rebound in 2021–2022 ( [[#IEA--2021|IEA 2021]] ) , some impacts of the pandemic (e.g., aspects of economy, finance and transport-related emission drivers) may last far longer. COVID-19 pushed more than 100 million people back into extreme poverty, and reversed progress towards some other SDGs including health, life expectancy and child literacy ( [[#UN%20DESA--2021|UN DESA 2021]] ) . Health impacts and the consequences of deep economy-wide shocks may last many years even without significant future recurrence ( [[#15.6.3|Section 15.6.3]] ). These changes, as well as the pandemic response actions, bring both important risks as well as opportunities for accelerating mitigation (Chapters 1, 5, 10 and 15).

Cross-Chapter Box 1

'''Lessons.''' Important lessons can be drawn from the pandemic to climate change including the value of forward-looking risk management, the role of scientific assessment, preparatory action and international process and institutions ( [[IPCC:Wg3:Chapter:Chapter-5|Chapter 5]] and [[#1.3|Section 1.3]] ). There had been long-standing warnings of pandemic risks and precursors – with both pandemic and climate risks being identified by social scientists as ‘uncomfortable knowledge’ or ‘unknown knowns’, which tend to be marginalised in practical policy ( [[#Rayner--2012|Rayner 2012]] ; [[#Sarewitz--2020|Sarewitz 2020]] ) . This echoes long-standing climate literature on potential ‘high impact’ events, including those ''perceived'' as low probability ( [[#Dietz--2011|Dietz 2011]] ; [[#Weitzman--2011|Weitzman 2011]] ) . The costs of preparatory action, mainly in those countries that had suffered from earlier pandemics were negligible in comparison, suggesting the importance not just of knowledge but its effective communication and embodiment in society (Chapter 5). Klenert et al. (2020) offer five early lessons for climate policy, concerning: the cost of delay; the bias in human judgement; the inequality of impacts; the need for multiple forms of international cooperation; and finally, ‘transparency in value judgements at the science–policy interface’.

'''Emissions and behavioural changes.''' Overall, global CO 2 FFI emissions declined by about 5.8% (5.1–6.3%) from 2019 to 2020, or about 2.2 (1.8–2.4) GtCO 2 in total ( [[IPCC:Wg3:Chapter:Chapter-2#2.2.2|Section 2.2.2]] ). Analysis from previous economic crises suggest significant rebound in emissions without policy-induced structural shifts ( [[#Jaeger--2020|Jaeger et al. 2020]] ) ( [[IPCC:Wg3:Chapter:Chapter-2#2.2.2.1|Section 2.2.2.1]] and Figure 2.5). Initial projections suggest the COVID aftermath may reduce emissions by 4–5% over 2025–2030 (Shan and Et.al 2020; [[#Reilly--2021|Reilly et al. 2021]] ), below a ‘no-pandemic’ baseline. The long-term impacts on behaviour, technology and associated emissions remain to be seen, but may be particularly significant in transport – lockdowns reduced mobility-related emissions, alongside two major growth areas: electronic communications replacing many work and personal travel requirements ( [https://www.ipcc.ch/report/ar6/wg3/chapter/chapter-10 Chapter 10] and [[IPCC:Wg3:Chapter:Chapter-4#4.4.3.4|Section 4.4.3.4]] ); and revitalised local active transport and e-micromobility ( [[#Earley--2021|Earley and Newman 2021]] ). Temporary ‘clear skies’ may also have raised awareness of the potential environment and health co-benefits of reduced fossil fuel use particularly in urban areas ( [[IPCC:Wg3:Chapter:Chapter-8#8.7|Section 8.7]] ), with evidence also indicating that air pollution itself amplified vulnerability to COVID-19 ( [[#Gudka--2020|Gudka et al. 2020]] ; [[#Wu--2020|Wu et al. 2020]] ). The significant impacts on passenger aviation are projected to extend not just through behavioural changes, but also fleet changes from retiring older planes, and reduced new orders indicating expectations of reduced demand and associated GHG emissions until 2030 (Sections 5.1.2 and 10.5) (AR6 WGI Box 6.1 in Chapter 6). However, air cargo has recovered more rapidly ( [[#IATA--2020|IATA 2020]] ), possibly enhanced by online ordering.

'''Fiscal, growth and inequality impacts.''' Aspects of the global and regional economic crises from COVID-19 may prevail much longer than the crisis itself, potentially compromising mitigation. M ost countries have undertaken unprecedented levels of short-term public expenditures. The International MonetaryFund (IMF) projects sovereign debt to GDP to have increased by 20% in advanced economies and 10% in emerging economies by the end of 2021 ( [[#IMF--2020|IMF 2020]] ). This is likely to slow economic growth, and may squeeze financial resources for mitigation and relevant investments for many years to come (Sections 15.2.3 and 15.6.3). COVID-19 further lowered interest rates which should facilitate low-carbon investment, but pandemic responses have increased sovereign debt across countries in all income bands ( [[#IMF--2021|IMF 2021]] ), and, particularly in some developing economies and regions, it has caused debt distress (Bulow et al. 2021), widening the gap in developing countries’ access to capital (Hourcade et al. 2021b) ( [[#15.6.3|Section 15.6.3]] ). After decades of global progress in reducing poverty, COVID-19 has pushed hundreds of millions of people below poverty thresholds and raises the spectre of intersecting health and climate crises that are devastating for the most vulnerable ( [[IPCC:Wg3:Chapter:Chapter-5#5.1|Section 5.1]] .2 and Box 5.1). Like those of climate change, pandemic impacts fall heavily on disadvantaged groups, exacerbate the uneven distribution of future benefits, amplify existing inequities, and introduce new ones . Increased poverty also hinders efforts towards sustainable low-carbon transitions ( [[#1.6|Section 1.6]] ).

'''Impacts on profitability and investment.''' COVID-19-induced demand reduction in electricity disproportionally affected coal power plants, whilst transport reduction most affected oil ( [[#IEA--2020a|IEA 2020a]] ) . This accelerated pre-existing decline in the relative profitability of most fossil fuel industries (Ameli et al. 2021) . Renewables were the only energy sector to increase output ( [[#IEA--2020a|IEA 2020a]] ) . Within the context of a wider ''overall'' reduction in energy investment this prompted a substantial ''relative'' shift towards low-carbon investment particularly by the private sector ( [[#IEA--2020b|IEA 2020b]] ; [[#Rosembloom--2020|Rosembloom and Markard 2020]] ) (Sections 15.2.1, 15.3. 1 and 15.6.1) .

'''Post-pandemic recovery pathways provide an opportunity to attract finance into accelerated and transformative low-carbon public investment (Sections 15.2 and 15.6.3).''' In most countries, COVID-19 has increased unemployment and/or state-supported employment. There is a profound difference between short-term ‘bail outs’ to stem unemployment, and the orientation of new public investment. The public debt is mirrored by large pools of private capital. D uring deep crises like that of COVID-19, economic multipliers of stimulus packages can be high ( [[#Hepburn--2020|Hepburn et al., 2020]] ), so much so that fiscal injections can then generate multipliers from 1.5 to 2.5, weakening the alleged crowding-out effect of public stimulus ( [[#Auerbach--2012|Auerbach and Gorodnichenko 2012]] ; [[#Blanchard--2013|Blanchard and Leigh 2013]] ) ( [[#15.2.3|Section 15.2.3]] ).

Cross-Chapter Box 1

Recovery packages are motivated by assessments of the macroeconomic effectiveness (‘multipliers’) of public spending in ways that can crowd-in and revive private investment (Hepburn et al. 2020 ). There are clear reasons why a low-carbon response can create more enduring jobs, better aligned to future growth sectors: by also crowding-in and reviving private investment (e.g., from capital markets and institutional investors, including the growing profile of environmental, social and governance (ESG) and green bond markets ( [[#15.6|Section 15.6]] )), this can boost the effectiveness of public spending ( [[#IMF--2020|IMF 2020]] ) . Stern and Valero (2021) argue that investment in low-carbon innovation and its diffusion, complemented by investments in sustainable infrastructure, are key to shaping environmentally sustainable and inclusive growth in the aftermath of the COVID-19 pandemic crisis. This would be the case both for high-income economies on the global innovation frontier, and to promote sustainable development in poorer economies.

A study with a global general equilibrium model (Liu et al. 2021) finds that because the COVID-19 economic aftermath combines negative impacts on employment and consumption, a shift from employment and consumption taxes to carbon- or other resource-related taxes would enhance GDP by 1.7% in 2021 relative to ‘no policy’, in addition to reducing CO 2 and other pollutants. A post-Keynesian model of wider ‘green recovery’ policies (Pollitt et al. 2021) finds a short-run benefit of around 3.5% GDP (compared to ‘no policy’), and even about 1% above a recovery boosted by cuts in consumption taxes, the latter benefit sustained through 2030 – outperforming an equivalent conventional stimulus package while reducing global CO 2 emissions by 12%.

'''Orientation of recovery packages.''' The large public spending on supporting or stimulating economies, exceeding USD12 trillion by October 2020, dwarfs clean-energy investment needs and hence could either help to solve the combined crises, or result in high-carbon lock-in (Andrijevic et al. 2020) . The short-term ‘bail outs’ to date do not foster climate-resilient long-term investments and have not been much linked to climate action, (Sections 15.2.3 and 15.6.3): in the G20 counties, 40% of energy-related support spending went to the fossil fuel industry compared to 37% on low-carbon energy ( [[#EPT--2020|EPT 2020]] ) . Recovery packages are also at risk of being ‘colourless’ ( [[#Hepburn--2020|Hepburn et al., 2020]] ), though some countries and regions have prioritised green stimulus expenditures for example as part of a ‘Green New Deal’ (Rochedo et al. 2021) (Sections 13.9 .6 and 15.6.3) .

'''Integrating analyses.''' The response to COVID-19 also reflects the relevance of combining multiple analytic frameworks spanning economic efficiency, ethics and equity, transformation dynamics, and psychological and political analyses ( [[#1.7|Section 1.7]] ). As with climate impacts, not only has the global burden of disease been distributed unevenly, but capabilities to prevent and treat disease were asymmetrical and those in greatest vulnerability often had the least access to human, physical, and financial resources ( [[#Ruger--2020|Ruger and Horton 2020]] ) . ‘Green’ versus ‘brown’ recovery has corresponding distributional consequences between these and ‘green’ producers, suggesting need for differentiated policies with international coordination (Le Billon et al. 2021) . This illustrates the role of Just Transition approaches to global responses including the value of integrated, multi-level governance (Sections 1.7, 4.5 and 17.1).

'''Crises and opportunities: the wider context for mitigation and transformation.''' The impacts of COVID-19 have been devastating in many ways, in many countries, and may distract political and financial capacity away from efforts to mitigate climate change. Yet, studies of previous post-shock periods suggest that waves of innovation that are ready to emerge can be accelerated by crises, which may prompt new behaviours, weaken incumbent (‘meso-level’) systems, and prompt rapid reforms (Roberts and Geels 2019a) ( [[#1.6|Section 1.6]] .5) . Lessons from the collective effort to ‘flatten the curve’ during the pandemic, illustrating aspects of science–society interactions for public health in many countries, may carry over to climate mitigation, and open new opportunities ( [[IPCC:Wg3:Chapter:Chapter-5#5.1|Section 5.1]] .2). COVID-19 appears to have accelerated the emergence of renewable power, electromobility and digitalisation ( [[#Newman--2020|Newman 2020]] ) (Sections 5.1.2, 6.3 and 10.2) . Institutional change is often very slow but major economic dislocation can create significant opportunities for new ways of financing and enabling ‘leapfrogging’ investment to happen ( [[#10.8|Section 10.8]] ). Given the unambiguous risks of climate change, and consequent stranded asset risks from new fossil fuel investments (Box 6.11), the most robust recoveries are likely to be those which emerge on lower carbon and resilient pathways (Obergassel et al. 2021) . Noting the critical global post-COVID-19 challenge as the double impact of heightened credit risk in developing countries, along with indebtedness in developed countries, Hourcade et al. (2021a) estimate that a ‘multilateral’ sovereign guarantee structure to underwrite low-carbon investments could leverage projects up to 15 times its value, contributing to shifting development pathways consistent with the SDGs and Paris goals.

COVID- 19 can thus be taken as a reminder of the urgency of addressing climate change, a warning of the risk of future stranded assets (Rempel and Gupta 2021) (Chapter 17), but also an opportunity for a cleaner recovery.

In addition to developments in climate science, emissions,the international agreements in 2015, and the recent impact of COVID-19, a few other key developments have strong implications for climate mitigation.

'''Cheaper renewable energy technologies.''' Most striking, the cost of solar photovoltaic (PV) has fallen by a factor of 5 to 10 in the decade since the IPCC Special Report on Renewable Energy ( [[#IPCC--2011a|IPCC 2011a]] ) and other data inputting to the AR5 assessments. The SR1.5 reported major cost reductions, the IEA (2020) World Energy Outlook described PV as now ‘the cheapest electricity in history’ for projects that ‘tap low cost finance and high quality resources.’ Costs and deployment both vary widely between different countries (Chapters 6, 9 and 12) but costs are still projected to continue falling ( [[#Vartiainen--2020|Vartiainen et al. 2020]] ). Rapid technological developments have occurred in many other low-carbon technologies including batteries and electric vehicles ( [[#1.4.3|Section 1.4.3]] ), IT and related control systems, with progress also where electrification is not possible (Chapters 2, 6 and 11).

'''Civil society pressures for stronger action.''' Civic engagement increased leading up to the Paris Agreement ( [[#Bäckstrand--2019|Bäckstrand and Lövbrand 2019]] ) and after. Youth movements in several countries show young people’s awareness about climate change, evidenced by the school strikes for the climate ( [[#Hagedorn--2019|Hagedorn et al. 2019]] ; [[#Buettner--2020|Buettner 2020]] ; [[#Thackeray--2020|Thackeray et al. 2020]] ; [[#Walker--2020|Walker 2020]] ). Senior figures across many religions ( [[#Francis--2015|Francis 2015]] ; [[#IFEES--2015|IFEES 2015]] ) stressed the duty of humanity to protect future generations and the natural world, and warned about the inequities of climate change. Growing awareness of local environmental problems such as air pollution in Asia and Africa ( [[#Karlsson--2020|Karlsson et al. 2020]] ), and the threat to indigenous people’s rights and existence has also fuelled climate activism ( [[#Etchart--2017|Etchart 2017]] ). Grass-roots movements ( [[#Cheon--2018|Cheon and Urpelainen 2018]] ; [[#Fisher--2019|Fisher et al. 2019]] ), build political pressure for accelerating climate change mitigation, as does increasing climate litigation ( [[#Setzer--2019|Setzer and Vanhala 2019]] ) (Chapters 13 and 14).

'''Climate policies also encounter resistance''' . However, there are multiple sources of resistance to climate action in practice. Corporations and trade associations often lobby against measures they deem detrimental ( [[#1.4.6|Section 1.4.6]] ). The emblematic ‘yellow vest’ movement in France was triggered by higher fuel costs as a result of a CO 2 tax hike ( [[#Lianos--2019|Lianos 2019]] ; [[#Driscoll--2021|Driscoll 2021]] ), though it had broader aspect of income inequality and other social issues. There is often a mismatch between concerns on climate change and people’s willingness to pay for mitigation. For example, whilst most Americans believe climate change is happening, 68% said in a survey they would oppose climate policies that added just USD10 per month to electricity bills (EPIC et al. 2019), and worry about energy costs can eclipse those about climate change elsewhere ( [[#Poortinga--2018|Poortinga et al. 2018]] ) (Chapter 13).

'''Global trends contrary to multilateral cooperation.''' State-centred politics and geopolitical/geo-economic tensions seem to have become more prominent across many countries and issues ( [[#WEF--2019|WEF 2019]] ). In some cases, multilateral cooperation could be threatened by trends such as rising populism, nationalism, authoritarianism and growing protectionism ( [[#Abrahamsen--2019|Abrahamsen et al. 2019]] ), making it more difficult to tackle global challenges including protecting the environment ( [[#Schreurs--2016|Schreurs 2016]] ; [[#Parker--2017|Parker et al. 2017]] ; [[#WEF--2019|WEF 2019]] ).

'''Transnational alliances.''' Partly countering this trend, cities, businesses and a wide range of other non-state actors also have emerged with important international networks to foster mitigation. City-based examples include the Cities Alliance in addressing climate change, Carbon Neutral Cities Alliance and the Covenant of Mayors (Chapter 8); there are numerous other alliances and networks such as those in finance (Chapter 15) and technology (Chapter 16), amongst many others (Chapters 13 and 14).

Finally, under the Paris Agreement process, during 2020/21, many countries strengthened their Nationally Determined Contributions (NDCs). Including updates until October 2021, these would imply global GHG emissions declining by 2030 to between 1–4% below 2019 levels (unconditional NDCs), or 4–10% (for NDCs conditional on international support) (Table 4.3). This is a significant change but would still not be compatible with 1.5°C pathways, and even if delivered in full, to limit warming to 2°C (&gt;67%), emissions would have to fall very rapidly after 2030 ( [[IPCC:Wg3:Chapter:Chapter-3#3.2.5|Section 3.2.5]] ).

Thus, developments since AR5 highlight the complexity of the mitigation challenge. There is no far-sighted, globally optimising decision-maker and indeed climate policymaking at all levels is subject to conflicting pressures in multiple ways. The next section overviews the drivers and constraints.

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