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Are we rebounding economies in an unsustainable way?

Posted on: 25 Mar 2021

Are we rebounding economies in an unsustainable way?

According to the latest data for 2020, released by IEA, the COVID-19 crisis has prompted the largest annual drop in 2020 of around 6% in global energy-related CO2 emissions since the Second World War.

IEA has recently started tracking energy demand and CO2 emissions trends on a monthly basis and has uncovered large variations in these parameters throughout 2020. The impact of COVID-19 restrictions on energy demand and CO2 emissions has not been uniform. These impacts during the second phase of restrictions on economies have been reportedly lower than during the first phase of restrictions.

In April 2020, when most of the countries around the world were in some form of restrictions, the largest monthly drop in emissions, of around 14.5%, was recorded. Later in the year when economic activity was on the road to recovery, even with COVID-19 restrictions in place, emission levels have been continuously on the rise. In fact, December 2020 has recorded 2% higher global emissions as compared to December 2019.

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Critically, major economies and in particular the top three biggest carbon emitting countries are rebounding activities in a carbon intensive and unsustainable way. China’s emissions have increased by 75 million tonnes in 2020 as compared to 2019. US emission levels in December 2020 have almost reached the same level as December 2019. India’s emission levels between September and December 2020 surpassed the 2019 levels during the same period. This is a worrying trend for other economies and regions that are looking to maintain their emission levels as the levels seen during the COVID-19 restriction or at least improved than in pre-COVID period.

What are the trends in EU?

Countries across EU have seen multiple restrictions of different levels since start of the pandemic. Many countries still have stay at home measures, home-schooling, and businesses shutdowns.

Annual CO2 emissions across EU dropped by 10% in 2020 compared to 2019. The monthly energy emissions profile for the EU is showing a similar trend to the other major global economies. April 2020 saw a 22% drop in CO2 emissions in comparison with the same month in 2019. As restrictions were relaxed over the following months, a rise in emission were observed and although, restrictions were in place across much of Europe, December 2020 emissions were only 5% lower than those in December 2019.

The evidence of the rebound in energy demand and emissions, albeit slow as compared to other economies, across the EU indicates that emissions in 2021 and beyond are on an upward rather than downward trend. In order to arrest this trend, the EU will need to take extraordinary steps in terms of not just putting post-COVID energy sustainability policies in place, but will also need to put in place strong measures to ensure the ground-level implementation of the policies.

What this means for Ireland?

Ireland is a carbon-intensive economy. Fossil fuels accounted for 76% of all energy used in Ireland in 2019. Oil is still the dominant fuel for final energy use, with a share greater than 57% of total final energy use in 2019. Transport and home heating account for 86% of oil use. Natural gas with 16% of total final energy consumption is the second largest energy source in the Irish economy.

The latest report published by EPA and SEAI looking at the impact of COVID-19 showed a 5.9% reduction in greenhouse gas (GHG) emissions in 2020 compared to 2019 levels with the transport sector recording the highest decline in emissions of almost 17%. The majority of these declines were due to highly restricted travel and the significant decline in economic activity and therefore cannot be relied upon to make an enduring contribution to our carbon reduction ambitions.  

A downward trend in the amount of electricity produced using coal and peat have contributed to some extent to this emissions reduction in 2020. Ireland has made considerable progress in integrating renewables, in particular onshore wind, into the electricity system which has one of the highest penetrations of renewable energy in the world. In 2020, 40% of all electricity generated in Ireland was from renewable sources.

Ireland’s residential sector emissions increased by 9%, mainly due to increased requirements for home heating, as people were staying at home and working from home for much of 2020. This also highlights the need in a post-COVID world the importance of efficiently heating our homes.

Petrol consumption and diesel consumption reached its lowest level in April 2020 and recorded 77% and 55% reduction in fuel consumption compared with the month in 2019. However, as the restrictions were reduced, the fuel consumption began to increase. These trends demonstrate that Ireland has probably followed the same patterns seen in EU monthly emission data released by the IEA.

Why Ireland should keep focus on energy sustainability?

Thanks to the vaccine and there is hope that soon we will come out of this most restrictive lockdown of our generation and hope to see a significant increase in our economic activity in the near future. However, the figures indicate that once the economy fully reopens, our CO2 emissions are likely to go at pre-COVID emission levels or beyond.

Decarbonisation of heating and transport sector has to be prioritized. Retrofitting homes, heat pump implementation, and electric vehicle targets outlined under the government’s Climate Action Plan will be the most important targets to track over the coming years. It is critical to prioritize investment in environmental, social and economic infrastructures of Ireland. The Post-Pandemic energy demand and emissions, especially in the first two years will set the trajectory for our 2030 and 2050 ambitions.

This pandemic has triggered the most serious economic crisis of the century, and of course, there has to be a greater focus on creating jobs, reviving industries and businesses, and boosting the economy. However, this should be not at the cost of our environment, health and general well-being. A trade-off has to be made between short-term and long-term gains. Resources are scarce and immediate benefits are tempting, but we can’t fall to the victim of it. This is the tough moment for leadership and leadership has to see the historic opportunity of this crisis to develop a more resilient and sustainable society.

A version of this article has been published in Irish Examiner here