COVID-19 recovery packages can benefit climate targets and clean energy jobs, but scale of impacts and optimal investment portfolios differ among major economies

Abstract

To meet the Paris temperature targets and recover from the effects of the pandemic, many countries have launched economic recovery plans, including specific elements to promote clean energy technologies and green jobs. However, how to successfully manage investment portfolios of green recovery packages to optimize both climate mitigation and employment benefits remains unclear. Here, we use three energy-economic models, combined with a portfolio analysis approach, to find optimal low-carbon technology subsidy combinations in six major emitting regions: Canada, China, the European Union (EU), India, Japan, and the United States (US). We find that, although numerical estimates differ given different model structures, results consistently show that a >50% investment in solar photovoltaics is more likely to enable CO2 emissions reduction and green jobs, particularly in the EU and China. Our study illustrates the importance of strategically managing investment portfolios in recovery packages to enable optimal outcomes and foster a post-pandemic green economy.