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Green stimulus: an opportunity for economic and climate recovery
Around the world, there has been dynamic discussion around how various economies can recover from the damage of COVID-19.

11.05.20
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• WHOLE OF ECONOMY
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Calls for climate to be central in stimulus packages, have been resounding across the world. Here’s a summary of but some of these.
Leaders from major corporations including Rio Tinto, BP, HSBC and Shell have come together with the Energy Transitions Commission, urging massive investments in renewable power systems, boosts for green buildings and green infrastructure, targeted support for innovative low-carbon activities and similar measures.

The founding partners of the Investor Agenda, including the Investor Group on Climate Change, the Asia Investor Group on Climate Change, the Institutional Investor Group on Climate Change, Ceres, Principles for Responsible Investment, CDP and the United Nations Environment Programme Finance Initiative, have signed a statement calling on governments to prioritise net zero emissions projects in areas like infrastructure, transport, property and energy.

The UN Secretary General’s COVID-19 Response and Recovery Fund urges a ‘human-centred, innovative and coordinated stimulus package reaching double-digit percentage points of the world’s gross domestic product’, with António Gutteres demanding the integration of climate action into all aspects of recovery.

Meanwhile, a coalition of European CEOs, politicians and academics is calling for major investment in projects to make the EU the ‘world’s first climate-neutral continent’ by 2050. Their so-called ‘Green Recovery’ platform has been signed by representatives of global companies, such as PepsiCo, Microsoft, Enel, E.ON, Volvo Group, L’Oréal, Danone, Ikea and more.

The Canadian government has directed stimulus funding to reduce emissions in the oil and gas sector, while the recent election in South Korea has brought the Democratic party into power with a mandate for Green New Deal, with the country becoming the first in east Asia to pledge to reach net zero emissions by 2050.

In Australia, the Clean Energy Council argues for a ‘clean recovery’, claiming stimulus could triple the amount of large-scale renewable energy in the country while creating over 50,000 new direct jobs.

New research from an Oxford team including Nobel prize winner Joseph Stiglitz and leading climate economist Nicholas Stern contends that spending on new green energy projects generates twice as many jobs for every dollar invested than equivalent allocations to fossil fuel projects.

At the same time, an analysis by Vivid Economicssuggests that most of the stimulus packages so far implemented by governments should not be considered ‘green’, with ‘the vast majority of the money going to business in the short term [potentially] risking future environmental sustainability.’