Global greenhouse gas emissions are set to decline in 2020 due to the economic disruption caused by the Covid-19 outbreak, according to a new report from MSCI Research.
The firm estimates that global emissions will decline by 2.1% this year compared to 2019 levels. That represents an 8.3% decrease from the level that emissions may have reached in 2020, MSCI said.
The projections are based on efforts to model the relationships between stock prices, economic growth and GHG emissions.
The expectation that emissions will decline is also validated by satellite imagery that shows reduced air pollution over China when the country was in lockdown, which reduced travel, power generation and industrial output.
“This modeled decline in 2020 emissions does not necessarily indicate a structural change to our current world economy,” MSCI said. “The estimated emission levels are still comparable to those observed over the past five years, and the economy could readily rebound, returning emissions to prior levels.”
Indeed, MSCI suggested that the curb in emissions will likely only last as long as the economic downturn.
“If so, the risk climate change poses to countries, companies and investors has not dissipated. A much more visible and immediate crisis has simply overshadowed it,” MSCI said.