A new report found that of the $ 14.6 trillion announced in spending on the 50 largest savings, only $ 368 billion, or 2.5 percent, went to green activities.
Photographer: Robert Atanasovski / AFP / Getty Images
Photographer: Robert Atanasovski / AFP / Getty Images
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The exuberance of vaccine launches in rich countries masks an ugly reality. Greenhouse gas emissions are already crawling higher than before the pandemic as economies come back to life.
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It shouldn’t be a total surprise. Even though governments around the world have spent billions of dollars to help their nation recover, only a small part has gone to initiatives that would reduce pollution.
Many politicians, including US President Joe Biden, have adopted the phrase “rebuild better.” But they have not yet fulfilled their promise. This is the conclusion of a new report from Oxford University and the United Nations Environment Program (UNEP). The researchers found that of the $ 14.6 trillion announced by the 50 largest economies in 2020, only 2.5% went to green activities.
And that limited stimulus is not spread evenly around the globe. “The vast majority of green spending has been driven by only five countries,” said Brian O’Callaghan, project manager of the University of Oxford’s economic recovery project and lead author of the report.
Much of the initial spending, of about $ 11 trillion, was directed at rescuing distressed firms, lending to small businesses and cash to individuals. In general, economists agree that it was necessary to avoid an even worse result.
But much of the rest of the stimulus money could have been better spent. “There was a rush to support the companies without thinking about attaching green lines,” said Inger La Cour Andersen, UNEP’s executive director.
Read more: 26 ways to launch a clean energy future from pandemic recovery
These conditions could probably ensure that companies saved with taxpayers’ money were required to set emission targets in accordance with, say, the Paris Agreement. It happened a few times. Some European airlines, for example, have been forced to discontinue short-haul flights when they have accepted government funding during the pandemic.
Stimulus not so green
Only 2.5% of the world’s recovery costs went to supporting green activities
Source: Source: Global Recovery Observatory
While some economists argue that setting such rules may hinder recovery efforts, the vast majority, including many influential minds in central banks, argue that spending on green activities can help create as many jobs as support activities. with high emissions.
One reason for the failure may be that governments did not have “green ways to invest,” Andersen said. Countries can improve by learning from each other when it comes to what types of green spending are most effective.
That’s why O’Callaghan’s team also launched the Global Recovery Observatory. It tracks incentive spending around the world and has so far submitted more than 3,500 policies to its database. Using real-world examples, the group’s economic advisers can help decision-makers shape green spending policies to suit their specific needs.
The tracking system can also help civilian organizations to hold governments accountable. Given the actual figures as a benchmark, it will be easier to identify governments that claim to be pushing for an ecological recovery, but in fact are not doing enough.
The world economy has shrunk just as much 3.5% in 2020, according to the International Monetary Fund. This is the largest decline in global gross domestic product since World War II and means that the recovery will take several years. So there is still time to push stimulus spending in a greener direction.
Akshat Rathi writes the Net Zero newsletter, which examines the world’s race to reduce emissions through business, science and technology. You can email it with feedback.
“With the assistance of Will Mathis.”