It has been claimed that COVID-19 public stimulus packages could be sufficient to meet the short-term energy investment needs to leverage a shift toward a pathway consistent with the 1.5 °C target of the Paris Agreement. Here we provide complementary perspectives to reiterate that substantial, broad, and sustained engagements beyond recovery packages will be needed for achieving the Paris Agreement long-term targets. Low-carbon investments will need to scale up and persist over the next several decades following short-term stimulus packages. The required total energy investments in the real world can be larger than the currently available estimates from Integrated Assessment Models (IAMs). Existing databases from IAMs are not sufficient for analyzing the effect of public spending on emission reduction. To inform what role COVID-19 stimulus packages and public investments may play for reaching the Paris Agreement targets, explicit modelling of such policies is required.

Part of the economic recovery plans implemented by governments following COVID-19 is directed towards the energy transition. To understand the potential effects of these post-COVID green recovery packages on reductions of greenhouse gases emissions, we investigated three different approaches. Firstly, we analysed simulation results of Integrated Assessment Models (IAMs) to infer the change in CO2 intensity of GDP that could result from post-COVID low-carbon investment plans. Secondly, we investigated the scenarios provided by the International Energy Agency (IEA) based on a bottom-up energy system model. By combining the two approaches, we found that green recovery packages implemented and planned globally can lead to an emission reduction of merely 1%-6% from 2030 baseline levels at most. Thirdly, we looked into the results of the Adaptative Regional Input-Output model, which simulates the dynamic effects of economic crisis and fiscal stimuli through supply chains following labour shortage. The third approach shows that the increase of activity driven by fiscal stimuli leads to a rebound of CO2 emissions even if they do not target carbon-intensive sectors. We conclude that green recovery packages targeting low-carbon technologies have a limited impact on near-term CO2 emissions and that demand-side incentives, as well as other policy efforts to disincentivise the use of fossil fuels, are also important for scaling up climate mitigation.