Trillions of dollars donated to save economies around the world from the Covid-19 crisis have been spent in ways that worsen the climate crisis and harm nature because governments have broken their promises to ” green recovery ”from the pandemic.
According to an analysis by Vivid Economics, released Thursday, only about a tenth of the $ 17 billion in bailouts provided by governments since the start of the pandemic has been spent on activities that have reduced greenhouse gas emissions or restored the natural world.
Of the total spending, most went to emergency measures, such as paying wages, to keep savings afloat. But about $ 4.8 billion in spending, including spending on road building, bailouting airlines, and increasing food production, had a clear environmental impact – and Vivid Economics found that most of this impact was negative.
About $ 3 billion has been spent in ways that increase greenhouse gas emissions and harm the natural world, exceeding the $ 1.8 billion spent globally on green projects, such as renewable energy and low carbon transport.
Jeffrey Beyer, economist at Vivid Economics and lead author of the report, said the “green recovery” promised by many governments last year has not materialized.
He said: “Governments could certainly have done better. They spend public money on things that harm the public. It’s just shocking and impossible to justify. In some cases, it would also have been cheaper to make better decisions. “
Renewable energy, for example, is cheaper than fossil fuels for power generation in most parts of the world, while the cost of electric vehicles has also fallen rapidly.
Few governments had taken nature’s impacts into account and in some cases relaxed environmental regulations, such as legal restrictions on logging and the need for environmental impact assessments for developments, citing Covid-19 as the reason, with little justification.
Beyer added: “We haven’t seen enough movement towards green spending. It’s hard to be optimistic when looking at the evidence to what extent climate change and nature haven’t really been factored into public spending decisions.
Spending on economic stimulus has had a negative environmental impact in 20 of the 30 countries surveyed by Vivid. The EU as a whole, Denmark, France, Spain and Germany have all done well in diverting more of their stimulus spending to environmentally beneficial ends. But some major economies have not done so well; China and India have spent significantly more on projects that would harm the climate and nature, like coal-fired power plants. Russia came in at the bottom of the rankings in terms of damage caused by its stimulus.
The UK image was “mixed,” Beyer said. The UK government has presented a 10-point plan, including investments in offshore wind energy and low-carbon innovations. However, ministers scrapped the Green Home Grant, a housing insulation assistance program, after just six months and following a litany of failures.
The US stimulus package has also been altered, as political wrangling over Joe Biden’s $ 2 billion plan reduced the amounts to be spent on creating “green” jobs in areas such as renewables. Beyer said the full impacts of US spending plans were not yet clear.
Brian O’Callaghan, senior researcher on the University of Oxford’s Economic Recovery Project, said the Oxford Global Recovery Observatory’s analysis found more than 560 examples of positive environmental spending. He said there was still uncertainty over what would happen to the stimulus spending, especially in light of new variants of Covid-19.
“Despite the weakness of green investments to date, there remain strong opportunities for governments to embark on green industry transitions to bring economic recovery alongside environmental progress,” he said.
Immunization programs would help countries shift their spending more towards a long-term direction, which would help green investments, O’Callaghan said. “Policymakers need to think about how green incentives can be built into traditionally neutral spending – for example, requiring new hospitals to have the highest energy efficiency standards, requiring new schools to be 100% powered by electricity. renewable energy, or require all government-funded construction to follow green procurement standards.
Edward Barbier, professor of economics at Colorado State University and author of a landmark report on the 2008-09 financial crisis, which found that about 16% of the stimulus was “green” then, agreed. He said: “It’s understandable that some of this extra stimulus [for Covid-19] is less green than expected. But that it is harmful to the environment and damaging to nature is inexcusable and will ultimately make matters worse for many people who have failed to tackle the looming climate crisis and other global environmental risks. ”
He urged the G20, whose ministers and leaders will discuss the resumption of Covid alongside the climate crisis in meetings ahead of the Cop26 climate talks in November, to step up their efforts.
“At some point, we need to move away from stimulating the existing ‘brown’ economy and implement long-term investment and pricing reforms to create the infrastructure, innovation and incentives for it. green economy we want and urgently need.
“The major G20 economies must take the lead in such a global strategy. As this report shows, they have so far failed to do so. It is imperative that the G20 address this challenge immediately and begin formulating a post-Covid green recovery strategy as a collective priority. “