Fossil fuels, climate change, and the COVID-19 crisis: pathways for a just and green post-pandemic recovery

ABSTRACT

A climate-positive COVID-19 recovery can accelerate the energy transition away from fossil fuels. Yet, current assessments of recovery stimulus programs suggest that the most fossil fuel producers are more likely to take on a ‘dirty’ recovery path out of the pandemic than a ‘green’ one. Such a path will postpone climate action and entrench fossil fuel dependence. To change course, fossil fuel producers have to get on board of a 'green recovery'. For this, cooperative international efforts mobilizing both fossil fuel consumers and producers need to promote ‘just transition’ policies that increase support for a green shift among fossil fuel companies and producing countries, including fossil fuel exporters. In turn, fossil fuel producers should leverage the opportunity of stimulus packages to reduce their fossil fuel production dependence and help accelerate an energy transition through supply-side measures. A combination of ‘green’ investments and ‘just’ transition reforms could help enroll fossil fuel producers into a climate-friendly post-COVID recovery.

Key policy insights

• Fossil fuel producers have mostly promoted ‘dirty’ rather than ‘green’ recovery paths from the COVID-19 pandemic

• A green recovery agenda requires a ‘just’ transition component to entice and support fossil fuel producers

• Both demand and supply-side strategies are required to advance a ‘just transition’ agenda throughout the post-COVID 19 recovery

• The post-COVID-19 transition requires energy policies responding to the constraints of consumer and producer countries to address climate and equity challenges

KEYWORDS:

• COVID-19
• resource curse
• carbon curse
• climate change
• green transition
• just transition

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 By ‘just transition’ we mean not only the need to address fossil fuel jobs at stake, revenues potentially lost by fossil fuel dependent communities and authorities, and issues of energy affordability (Heffron & McCauley, 2018; Henry et al., 2020), but also to consider question of equity with regard to a managed production decline between different types of fossil fuel producers (see Le Billon & Kristoffersen, 2020).

2 Although we stress the risk of having – yet again – some fossil fuel companies acting in bad faith, at times in collusion with their home government, in order to secure yet further subsidies in exchange for empty ‘green’ promises and false ‘climate friendly’ statements (Freese 2020; Kenner & Heede, 2021).

3 Out of the $13 trillion in global fiscal stimulus policies for the 21 countries, $4 trillion are categorized as having environmental impacts, including carbon emissions (VividEconomics, 2020). These stimulus policies mostly concern agriculture, energy, industry, transport, and waste. We note that while most stimulus packages are on average environmentally negative, the largest ones – with the exception of Japan – are environmentally positive (e.g. US and EU/EU member states).

4 Discussions and policy implications around a green recovery should also consider its impacts on low-carbon commodity producers (e.g. lithium, cobalt, or rare metals used in renewable energy production), as many challenges remain to ensure positive equity and sustainability outcomes, including larger and more volatile revenues, biodiversity loss, adverse public health impacts, poor labour standards, and various types of commodity-related conflicts.

Additional information

Funding

This work was supported by the Social Sciences and Humanities Research Council of Canada.