The economic policy responses to the upcoming recession in Germany and many other countries due to the coronavirus pandemic will have a major impact on climate action. Governments have drawn up unprecedented aid packages to keep businesses and workers afloat. Now they are discussing stimulus packages worth hundreds of billions of euros that could lock in investments and technological developments in key areas for the energy transition for years after the corona crisis has passed at a time when many companies face future-defining decisions on their decarbonisation strategies.
Environmental think tanks, economists, climate researchers and others already weighed in on the debate about how mistakes made in the wake of the financial crisis that let fossil fuel intensity spike could be avoided this time. Many also say the corona crisis offers an opportunity to leapfrog transition steps that otherwise could take years, as the comprehensive economic lockdown caused by the outbreak allows policymakers as well as individual citizens to reflect on ingrained habits and procedures.
In a discussion paper , the Wuppertal Institute for Climate, Environment and Energy advocated a Three-Stage-Model to respond to the economic impact, divided into short-, medium- and long-term approaches. While virus containment and financial survival of business clearly take precedence, longer lasting measures also had to be initiated now to ensure they take effect, the researchers argued.
Economic cooperation body OECD cautioned that any stimulus response to the virus could only unfold its full potential if it is internationally coordinated and not pursued by each state individually. The European Commission has illustrated this approach in its call for a European "Marshall Plan" for economic recovery that is supposed to orchestrate responses across the bloc. The World Bank commented making sure that these approaches do not run counter to climate policy aims could be achieved by using Nationally Determined Contribution plans in the context of the Paris Agreement as a starting point.
In Europe and Germany, governments are able to draw on measures outlined in the Green Deal and the national Climate Action Programme, respectively. The Clean Energy Wire will collect and update fresh proposals made for green stimulus measures in different economic areas in the list below. The standstill of production lines at Volkswagen, Daimler and other carmakers has illustrated how the corona crisis struck to the core of Germany's industrial production sector.
