Policymakers tackling the coronavirus crisis have been encouraged to prioritize policies which help mitigate a second, looming crisis: climate change. To ensure that these two ambitions do not undermine each other the paper identifies and analyzes policies that combat both the coronavirus crisis and the climate crisis. At the core is an analysis both of the long-run climate impacts from coronavirus related economic recovery policies, and the impacts of long-run climate policies on economic recovery and public health post-recession. The analysis is based on data on emissions, employment and corona-related layoffs across sectors, and on previous research. 

Among climate policies, labor-intensive green infrastructure projects, planting trees, and in particular pricing carbon coupled with reduced labor taxation boost economic recovery. Among coronavirus policies, aiding services sectors (leisure services such as restaurants and culture, or professional services such as technology), education and the healthcare sector appear most promising, being labor intensive yet low-emission—if such sectoral aid is conditioned on being directed towards employment and on low-carbon supply chains. 

In contrast to what many suggest, large-scale green infrastructure projects and green R&D investment, while good for the climate, are unlikely to generate enough employment to effectively alleviate the coronavirus crisis.

Link to paper here.

Posted by Daniel Spiro,

Uppsala University