World map of bank notes

Government projects to beat the recession across the Globe

From South Korea to Italy; from Russia to Canada - E&T on how all available resources are mobilised to beat the global economic downturn.


Project: Managed Motorways
Stimulus funds: £400m

Chancellor Alistair Darling's stimulus package in his Pre-Budget Report last November included £1bn for transport, of which £400m was specifically earmarked for extending the Active Traffic Management (ATM) system, trialled on the M42 in the West Midlands.

The ATM technology comprises electronic signs and variable speed limits that permit drivers to use the hard shoulder during times of peak traffic flow (as measured by sensors in the road). Regular refuge areas allow motorists to pull over safely in the event of mechanical problems, and the whole ATM zone is monitored closely by CCTV operators who can selectively close or re-open lanes.

ATM is a quick win for the Highways Agency: it costs around a fifth as much as permanently widening a motorway and can be up and running in a fifth of the time. Journey time is reduced by an average of about 25 per cent. The stimulus funds allow the government to accelerate the introduction of ATM, with systems planned for the M1, M4, M5 and M6 motorways.


Project: Warm Front
Stimulus funds: £150m

The Pre-Budget Report contained £535m of capital spending for low-carbon growth and jobs. The biggest single item in this green stimulus is for Warm Front, an initiative focused on increasing domestic energy efficiency through insulation and heating improvements. While there is little new technology involved in the project, the cumulative effect of upgrading to a gas condensing boiler and installing loft, internal and cavity wall insulation can be dramatic, steeply reducing household bills and carbon emissions. At a cost of around £2,000-2,500 per household, the measures will be enough to raise 60,000 homes out of fuel poverty (defined by spending over 10 per cent of their income on heating).

However, environmental groups do not believe the measures go far enough. They point both to the large number of homes in fuel poverty (3.5 million in 2006) and the disproportionate stimulus packages given to the car and road-building industries. Greenpeace calculates that the combined effect of all the green stimulus measures in the Pre-Budget Report will delay the accumulation of the UK's carbon emissions by just five-and-a-half hours - and that overall stimulus package is possibly even carbon negative.


Project: Strategic Investment Fund
Stimulus funds: £750m

The destination of three quarters of billion pounds of high-tech stimulus money, announced by Alistair Darling in April's budget is still unclear. The Strategic Investment Fund was set up to "support advanced industrial projects of strategic importance", focusing on emerging technologies, digital and biotech.

The Chancellor intends the money to encourage export and inward investment, support R&D and commercialise scientific research. However, almost four months after it was first announced, there has been little guidance as to who might qualify for funding. A third of it (£250m) has been earmarked for low-carbon projects, the Technology Strategy Board gets a further £50m to co-ordinate government action for innovation, while UK Trade and Industry is due £10m.

Some may be used to support the government's Universal Broadband commitment, as outlined in June's Digital Britain report. This aims to give every household in the UK access to a 2Mbit/s broadband Internet connection no later than 2012 by fixing domestic wiring issues, investigating network problems, upgrading infrastructure and integrating wireless and satellite systems.

The Department for Culture, Media and Sport expects up to two-thirds of the population to be enjoying multi-megabit Internet access through commercial services within a decade. Remaining low income homes will have access funded by a monthly tax of 50 pence on all fixed telephone lines.


Project: Messina Bridge to Sicily
Stimulus funds: £1.1bn

Possibly the single most ambitious stimulus-funded engineering project in the world at the moment is the proposed bridge over the Straits of Messina, to link Sicily with the Italian mainland. The 3.3km suspension bridge will be over a kilometre longer than the world's longest bridge, the Akashi-Kaiyo in Japan, and 40m taller than the world's highest, France's Millau Viaduct.

The idea of a land link between Sicily and Rome has been around since antiquity, when the Romans proposed building a bridge made of boats. Tunnels - including one based on Napoleon's Channel Tunnel plans - were a popular suggestion in the 19th century, followed by railway and double-decker bridges in the 20th.

Silvio Berlusconi managed to get the current design for the Messina bridge green-lit in 2006, but it was almost immediately cancelled by the Italian Parliament over fears that it would prove difficult to build, be prone to earthquakes and risked funnelling cash into organised crime in the region. In March this year, Berlusconi again secured funds for the bridge, with a £1.3bn appropriation towards its final estimated cost of £5.2bn.

The bridge is planned to carry three lanes of traffic, a railway line and a pedestrian/cycle lane in each direction, supported by two gargantuan towers, each taller than the Empire State Building. Impreglio, the international consortium that won the building contract, envisages five years of construction work for the bridge and its neighbouring road and rail links, but critics remain sceptical of its viability.


Project: High speed rail
Stimulus funds: £5bn

During his election campaign, rail enthusiast Vice-President Joe Biden promised "the most train-friendly administration ever". While the US is unlikely to see a return to the massive land grants handed to the transcontinental railway companies of the 19th century, the Obama White House has largely lived up to his words.

Eleven high speed rail 'corridors' of between 100 to 600 miles are now competing for £5bn in stimulus cash, plus the promise of £600m in annual funding for the next five years. If the whole high-speed network were implemented, it would result in an annual reduction of around three billion kilograms of carbon dioxide emissions. Unlike most other infrastructure projects named in the American Recovery and Reinvestment Act (ARRA), high-speed rail doesn't have to allocate and spend its money by September 2010 - a reflection of the ironically sluggish pace in rolling out the 150mph trains.

A front runner for attracting a large slice of the stimulus money is California's 800-mile network spanning the state, from San Francisco in the north down to San Diego on the Mexican border. Voters there have already approved a £6m down payment on the system. However, rival corridors include the Pacific North West between Portland and Vancouver, a hub network around Chicago and upgrades to the nation's only existing high speed rail system, running between Boston and Washington DC.

The challenges facing high-speed rail in America are legion. The long-neglected, federally-funded Amtrak corporation lacks resources and expertise in the latest technology, long distance tracks will cross multiple states, most of which have wildly differing budgets and legislation, and, ultimately, American consumers are still very much in love with their cars.


Project: Smart grid
Stimulus funds: £6.5bn

America's electro-mechanical power transmission system is falling apart. Power outages cost the economy billions of dollars annually and the American Society of Civil Engineers estimate that nearly a trillion pounds of investment is required by 2030.

President Bush began the push for a smart grid - dubbed an electric superhighway to support the information superhighway - back in 2003. His requirements were optimistic: it should be self-healing from failures; involve consumers in demand response; accommodate new generation and storage options; and operate resiliently against physical or cyber attacks.

Smart grids are attractive because they emphasise technological advances at the point of generation and consumption, rather than the wholesale (and extremely expensive) replacement of transmission lines - although some large-scale infrastructure spending will certainly be necessary.

The US Department of Energy will use the bulk of the Recovery Art money to support existing research and development programmes and to begin the process of turning experimental and demonstration systems into robust standards that can be implemented nationwide.

Many of the sexier initiatives in smart grids involve the flow of power in two directions: either from domestic micro-generation systems or through the use of next-generation plug-in electric cars to store power during times of excess generating capacity.


Project: 22 nuclear power plants
Stimulus funds: not released

China is being typically secretive about itemising its £360bn stimulus package but nuclear power is certainly one of the big winners. China's 11 nuclear power stations currently generate about 9GW annually, just 2 per cent of the requirements of a country that relies overwhelmingly on heavily polluting coal power plants.

Declaring a 'golden age for China's nuclear power development', a director at the National Energy commission announced recently that at least 22 'self-designed, self-constructed and self-managed' nuclear power stations were already under construction, with the aim of increasing nuclear output to at least 70GW by 2020.

This rush to nuclear power is in spite of China's 2006 Renewable Energy Law, which pledged to give priority to renewable energy resources. China's wind power generating capacity has doubled for each of the last three years, and renewables could account for 6 per cent of all power generated by 2020.

Another effect of the worldwide recession has been to stifle China's manufacturing base and its previously insatiable thirst for power. The Chinese government's own Energy Research Institute admits that the country will soon have an oversupply of power generation and is not predicting any significant increases in energy-intensive industries. 

South Korea

Project: Green New Deal
Stimulus funds: £22bn

Analysts at HSBC Global Research estimate that over 80 per cent of South Korea's £22bn stimulus spending is allocated to climate-related themes, compared to just 12 per cent in the US and 7 per cent in the UK. President Lee's recovery package focuses on four areas - conservation, quality of life, environmental protection and green infrastructure - and promises to create nearly a million jobs over four years.

Typical of the Green New Deal are plans to replace every incandescent lightbulb in the country's public buildings with high-efficiency LEDs, build two million green homes, develop low-carbon vehicles and promote rail and cycle travel. The country will even experiment with daylight saving time, which it hopes will cut electricity consumption (by a slim 0.3 per cent) and boost production by £600m annually.

The Ministry of Strategy and Finance calls the measures TTT, standing for 'timely, targeted and temporary'. Like America's original New Deal in the 1930s, most of the jobs created (about 70 per cent) will be for manual labourers and construction workers.

Inevitably, the eco-qualifications for some of the Green New Deal projects have been called into question. Environmental groups suspect that the 200,000 new jobs involved in 'river renewal' will simply mean more concrete, more dams and possibly even a new canal running the length of the country. And a 175-mile cycle path along the simmering demilitarised zone with North Korea is unlikely to do much for Seoul's legendary traffic congestion.

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