“This global crisis will certainly defer investments in clean energy,” said Kenneth Gillingham
, an associate professor of environmental and energy economics at the Yale School of the Environment (YSE) and lead author of the paper. “Depending on how policymakers respond, the consequences for human health from this deferred investment could far exceed the short-term environmental benefits that we have seen so far.”
Those short-term benefits have been substantial. Consumption for jet fuel and gasoline, for example, declined by 50 and 30 percent, respectively, from early March to June 7, while electricity demand fell by 10 percent. These impacts saved an estimated 200 lives per month since the lockdowns began.
However, there’s also been another, subtler outcome: most investment in clean energy technologies has come to a halt.
“Overall clean energy jobs dropped by almost 600,000 by the end of April, as investments in energy efficiency and renewable generation have plummeted,” said Marten Ovaere
, a postdoctoral researcher at YSE and co-author of the paper. “If that were to continue it could significantly set back the push toward a clean energy future.”
The paper, published in the journal Joule
, was coauthored by researchers at MIT Sloan School of Management and Northwestern University.
Drawing on evidence from previous economic shocks, the researchers examine two possible long-term scenarios in the U.S. In the best-case scenario — in which the threat subsides relatively quickly, the worst projections of human fatalities are avoided, and the economy rebounds — they say there should be few long-term implications. Most demands for products and services, they predict, “will be deferred rather than destroyed.” While record declines in emissions would be temporary, investments in new energy solutions would likely reach pre-pandemic levels.
If there is a persistent, long-term recession, however, the impacts on energy innovation would be significant. While energy use related to travel might remain lower, home energy consumption would increase and commercial building use would stay largely unchanged, particularly if office spaces are used in a similar way (even if more American workers decide to work from home). Also, if the public becomes cautious about using public transportation, many commuters will simply decide to drive instead.