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Mr. Pragyan Deb, Davide Furceri, Mr. Jonathan David Ostry, and Nour Tawk
Lockdowns resulting from the COVID-19 pandemic have reduced overall energy demand but electricity generation from renewable sources has been resilient. While this partly reflects the trend increase in renewables, the empirical analysis presented in this paper highlights that recessions result in a permanent, albeit small, increase in energy efficiency and in the share of renewables in total electricity. These effects are stronger in the case of advanced economies and when complemented with environment and energy policies—both market-based measures such as taxes on pollutants, trading schemes and feed-in-tariffs, as well as non-market measures such as emission and fuel standards and R&D investment and subsidies—to incentivize and hasten the transition towards renewable sources of energy.
Mr. Pragyan Deb, Davide Furceri, Mr. Jonathan David Ostry, and Nour Tawk

of environmental protection stringency. The last section concludes. II. Recessions, obsolescence, and policies Recessions are associated with a sharp decline in energy demand and the COVID-19 pandemic is no exception (see Buechler et. al. 2020 ). Lower demand in turn leads to excess electricity supply; and since the storage options for electricity are limited, power plants tend to be shut down. This is specially the case for dirty coal-based plants, because of their older technology and higher marginal cost of operation (including fuel costs). Whether