Do recessions reduce CO2 emissions?

The answer is Yes.

The Great Financial Crash, which got triggered by Lehman's Brothers collapsing in 2008, sent the world into a recession in 2009.

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Recessions mean reduced industrial activity. Households too are careful not to waste petrol and electricity, and they buy less stuff (triggering a drop in manufacturing, which in turn triggers a drop in energy use by factories).

In 2009 global emissions dropped by 1.3%. According to the Guardian, most of the drop was in developed nations where the recession was most severe:

Because the global financial crisis has mainly affected developed nations, this is where emissions dropped by the largest amounts: in the US by 6.9%, the UK by 8.6%, Germany by 7%, Japan by 11.8%, Russia by 8.4% and Australia by 0.4%.

In the emerging markets, however, there were big increases: China rose by 8%, India by 6.2% and South Korea by 1.4%.

Why did emissions in emerging markets rise? India didn't really have a recession, as it's banks were unaffected, and it generates most of it's GDP within it's borders. China dealt with the crash by going on a massive public spending spree, with the government paying for all sorts of energy-intensive construction projects to keep people employed. China's energy was powered by coal power stations.

In a way it's sad that a recession was needed to drop emissions. But it also points to a way forward - if we simply buy less stuff, that should reduce emissions produced by manufacture and transportation.