Green stimulus packages for a green future. A post covid-10 recovery.
The Covid-19 pandemic has dominated 2021 and is still wreaking havoc across the globe almost two years since it began. Worldwide, economies are facing their largest financial crisis in decades, healthcare systems have been put under immense pressure, lives have been lost and domestic and global inequalities have been exacerbated in light of the pandemic (Tai, Shah et al. 2021). With new variants on the rise, it is difficult to see when countries will fully recover from this virus. In this blog post I will have a look at the progress some countries are making towards a green recovery and how a ‘green’ stimulus package can help economies make a rebound from the pandemic whilst working towards achieving the SDG’s.
According to the sustainable development report in 2021, any progress that was made over recent years towards achieving the sustainable development goals (SDG’s) has taken a major setback “everywhere”. For the first time since the adoption of the SDG’s in 2015, the SDG index score has decreased from the previous year. The UNDP states that global poverty is on the rise for the first time in almost two decades. An extra 118 million people were exposed to hunger in the shadow of the pandemic in 2020 (FAO, 2021). According to the world bank, the global economy is set to make its largest recovery in 80 years to rebound from the covid-19 pandemic. We simply cannot return to a business as usual, unsustainable scenario. This rebound needs to focus on development, not just economic growth putting the well-being of the people at the forefront of the recovery. The pandemic has given us the opportunity for a ‘great reset’. In light of this setback, nations need to seize this opportunity by integrating environmental issues and inclusiveness into recovery and stimulus measures which will boost economies in the short term and reduce inequalities (OECD 2020).
The urgency to recover economies is overshadowing the needs to address climate change. A business as usual model of recovering our ‘brown economies’ will not suffice and will only exacerbate the climate crisis leaving us more vulnerable to future environmental and economic shocks. In 2008, the world suffered a major financial crisis, requiring governments to create packages to respond to the economic downturn in a similar way to this pandemic. Many countries announced green stimulus programmes to boost economies and move towards a more sustainable future. However, Greenhouse gas emissions have been on the rise since 2009 highlighting the unreadiness to meet demands of cutting emissions. With improved understanding of climate science, innovation and technologies we now have the chance to transform our economies. We need to learn lessons from the 2008 response to crisis and build back better. Policy makers need to create stimulus packages that maximize economic growth and employment whilst moving in a more sustainable direction.
According to the 2021 Global Carbon Project report, global CO2 emissions were down 5.4% during 2020, which can be seen below. Less emissions from factories, vehicles and airline transport resulted in beautiful clear skies in cities worldwide as the layer of smog that would usually cover cities like Paris, New Delhi and New York disappeared as a result of major lockdowns. Many were hopeful that this fresh, unpolluted air would become the new normal in urban areas. However emissions bounced back in 2021 as countries were eager to restart their economies leading us to question how effective a green stimulus package will be if countries are not willing to reform their systems
Nations need to develop strategic fiscal recovery plans that meet short term needs and achieves future prosperity. The three pillars for designing such a strategy to enable a prosperous future include:
1. Policy and regulation support
2. Public and private investment
3. Institutional support and capacity development
By using these pillars, decision makers can identify their starting points and priorities depending on their different social and environmental obligations (O’Callaghan et al, 2021).
Trillions of dollars, by 197 economies is being spent worldwide on fiscal stimulus packages to aid economies recoveries from the pandemic. Stimulating jobs in heavy emitting fossil fuel industries is a short term plan to boost economies but will have detrimental effects on future generations. Policy makers need to use fiscal policies to decouple greenhouse gas emissions from economic growth and focus on green initiatives from clean energy to sustainable transport (O’Callaghan,2021). Investments in low carbon green jobs is the key to any countries long term success in social, economic and environmental prosperity. New stimulus packages should direct investment towards developing smart grids, retrofitting and insulating buildings, enhancing green infrastructure, scaling up electric vehicles and charging points, and transforming urban areas into sustainable cities. Pricing carbon and pollution along with removing fossil fuel subsidies can be an effective strategy to accelerate the transition (Barbier, 2020). The world bank estimates that by 2050 almost two thirds of the world population will live in urban areas, therefore cities need to be transformed into green environments that cater for the health and well-being over their populations.
Having stimulus packages focus on green transformations can make direct progress on SDG 8 decent work and economic growth, SDG 9 industry innovation and infrastructure, SDG11 sustainable cities and communities, SDG 13 climate action and SDG7 affordable and clean energy. Better air quality can improve societal well-being and resistance (OECD 2020) bringing us a step closer to achieving SDG 3 good health and well-being whilst also reducing pressures on our healthcare systems along with having economic benefits. Currently 4.2 million people die each year from ambient air pollution according to the WHO. Rapid decarbonisation of every sector could save around 3.3 million deaths from air pollution every year as reported by the lancet commissions latest report on climate change and health.
A survey in the UK conducted by UK100 revealed that over 75% of the population believe that creating green jobs would help the with the economic rebound whilst lessening the impacts of climate change. There is a demand for these green solutions, governments need to implement them. Carbon Brief’s tracker informs us of governments intended stimulus measures that have a direct effect on climate change and energy. Ireland for example, are raising the energy efficiency of 500,000 homes by 2030. The stimulus plan will create an additional 3200 sustainable jobs by providing retrofit skills training. Similar stimulus packages are being implemented in the UK, Sweden and Denmark (Carbon brief, 2021). Pakistan is also thinking ahead and planning for a resilient future after the pandemic. As part of the billion tree tsunami agenda, Pakistan is employing thousands who have lost their jobs due to the pandemic to plant trees and become guardians of nature. This scheme has two objectives: create green jobs and protect nature, putting people and the planet at the forefront of their recovery. Already the country has created 85,000 daily wage jobs which it hopes to increase to 200,000 jobs in the coming months, an excellent initiative which shows how it is possible to recover from this pandemic whilst progressing towards achieving the SDG’s.
“While the stimulus packages for the COVID-19 recovery present a window of opportunity for green and resilient recoveries, these opportunities are not currently being seized” (Neufeldt, Christiansen et al. 2021). Although it would seem like some countries are on track to making this green recovery a reality, research by the UNEP show that in 2020, only 18% of spending by leading economies was spent on green recovery. with some countries such as India and China, the world’s largest economies allocating only 5.1% and 12% respectively much less than the global average (O’Callaghan, 2021). However, after COP26 and with updated NDC’s for COP27, it is hoped that some countries will make more ambitious recovery plans and increase investments towards greener recoveries.
It is difficult to assess whether it is too late to seize the opportunity for a green recovery and whether these green stimulus packages are enough to save us from climate catastrophe, partly because most of the benefits will be seen mainly in long term and also because countries are still battling the pandemic and the stimuli have not yet been fully implemented. As it stands, with most of countries expenditure not being directed towards green investments, it would seem that it is an opportunity lost but hopefully after COP26 countries will have realised the need to spend their money on greener, cleaner solutions. To keep up to date with data related to green recovery spending and to see what countries are leading the way in post pandemic green rebound take a look at this website by the UNDP: https://data.undp.org/content/global-recovery-observatory/
References:
- Neufeldt, H., et al. (2021). “Adaptation Gap Report 2021-The Gathering Storm: Adapting to climate change in a post-pandemic world.”
- OECD (2020). Making the Green Recovery Work for Jobs, Income and Growth, Paris: OECD.
- Tai, D. B. G., et al. (2021). “The Disproportionate Impact of COVID-19 on Racial and Ethnic Minorities in the United States.” Clinical Infectious Diseases 72(4): 703-706.
- Undp, Tran, V., Nghia, V. and Barbier, E. (n.d.). A green post-COVID-19 recovery Thinking must start now about the kind of sustainable economic recovery needed after the pandemic. [online] Available at: https://www.climate2020.org.uk/wp-content/uploads/2020/04/054-056-C2020-Barbier.pdf.
- Ipsos MORI. (n.d.). Two thirds of Britons believe Climate Change as serious as Coronavirus and majority want Climate prioritised in economic recovery. [online] Available at: https://www.ipsos.com/ipsos-mori/en-uk/two-thirds-britons-believe-climate-change-serious-coronavirus-and-majority-want-climate-prioritised.
- correspondent, F.H.E. (2020). UN chief: don’t use taxpayer cash to rescue carbon-intensive industries. The Guardian. [online] 28 Apr. Available at: https://www.theguardian.com/environment/2020/apr/28/un-chief-dont-use-taxpayer-money-to-save-polluting-industries.
- WHO (2019). Air pollution. [online] Who.int. Available at: https://www.who.int/health-topics/air-pollution#tab=tab_1.
- ODI: Think change. (n.d.). How to build back greener in the Covid-19 recovery. [online] Available at: https://odi.org/en/insights/how-to-build-back-greener-in-the-covid-19-recovery/ [Accessed 29 Dec. 2021].
- dashboards.sdgindex.org. (n.d.). Sustainable Development Report 2021. [online] Available at: https://dashboards.sdgindex.org/chapters/executive-summary.
- O’Callaghan, B., Kingsmill, N., Waites, F., Aylward-Mills, D., Bird, J., Roe, P., Beyer, J., Bondy, M., Aron, J., and Murdock, E (2021). Roadmap to Green Recovery. Oxford University Economic Recovery Project.