The global economy is facing a serious recession due to COVID-19, with implications for CO2 emissions. Here using an adaptive regional input-output model and scenarios of lockdown and fiscal counter measures, we show that global emissions will decrease 3.9% to 5.6% in five years (2020 to 2024), compared with a no pandemic baseline scenario (business as usual for economic growth and carbon intensity decline). Global economic interdependency via supply chains means that blocking one country’s economic activities causes other countries emissions to decrease even without lockdown policies. Supply chain effects contribute 90.1% of emissions decline from power production in 2020, but only 13.6% of transport sector reductions. Simulation of follow-up fiscal stimuli in 41 major countries increase global five-year emissions by -6.6 to 23.2 gigatons (-4.7% to 16.4%), depending on the strength and structure of incentives. Therefore, smart policy is needed to turn pandemic-related emission declines into firm climate action.