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Green investment key to restarting post lockdown economies

Governments should make “green” investments to get the economy up and running again as they will create the best financial returns in addition to tackling climate change, economists have said.

In the UK, investment in renewables projects; fitting homes and buildings with extra insulation; improving broadband, and encouraging electric cars and e-bikes could all help kickstart the economy and cut emissions.

“The Covid-19 crisis could mark a turning point in progress on climate change,” the co-authors of the new study wrote.

Estimates suggest the coronavirus pandemic will trigger an 8 per cent drop in carbon emissions this year due to reduced industrial activity and less use of transportation.

This remains only just above the 7.6 per cent cuts that scientists say are needed annually in order to ward off the most dangerous effects of global warming.

The authors of the study - including Nobel laureate Joseph Stiglitz and climate expert Lord Nicholas Stern - examined over 700 economic stimulus policies launched during or since the 2008 financial crisis and surveyed 231 experts from 53 countries, including senior officials from finance ministries and central banks.

They found that green projects that reduced emissions consistently created more jobs and delivered higher short-term returns than other measures.

For example, building renewables projects or rolling out home insulation refits creates twice as many jobs in the short term per pound spent, compared with fossil fuel investments, and do not run the risk of jobs being moved offshore.

The study suggests that without strong action, the carbon reductions achieved this year will not last.

“The Covid-19-initiated emissions reduction could be short-lived,” said lead author Cameron Hepburn, University of Oxford.

“This report shows we can choose to build back better, keeping many of the recent improvements we’ve seen in cleaner air, returning nature and reduced greenhouse gas emissions.”

Measures should also include helping industry cut emissions; investing in clean infrastructure, such as public transport; education and retraining for people who might lose jobs in the shift to low carbon, and supporting research and development, the study urged.

Prof Dave Reay, University of Edinburgh, said: “By aggressive investment in green skills and the creation of a swathe of green economy employment opportunities, the UK can buffer Covid-19’s impacts and simultaneously deliver a safer climate future.”

Last week, a report claimed that 11,000 deaths have already been avoided across Europe due to improvements in air quality since lockdowns began. 

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