Covid-19 stimulus packages will increase carbon output overall, report warns
The majority of global spending on stimulus packages designed to lift economies out of Covid 19-induced slumps is not targeted at measures to tackle climate change, a major study has found.
Published by Vivid Economics and Finance for Biodiversity, the report finds that the world’s leading economies aim to pump approximately $4.6tr (£3.4tr) directly into sectors that have a large and lasting impact on carbon emissions and nature. These are agriculture, industry, waste, energy and transport. However, less than $1.8tr has been green investment.
These numbers compare with a total stimulus to date of $14.9tr, which governments have largely failed to spend on low carbon measures.
Damningly, the report finds that the announced stimulus to date will have a net negative environmental impact in 15 of the G20 countries and their economies, as well as in five of the ten additional countries analysed.
“To date, the [global] economic response to the Covid-19 crisis will reinforce negative environmental trends,” the report states. “In other words, it will fail to build back better: most governments have chosen not to use economic stimulus to enhance nature or tackle climate change.
“However, there is an opportunity to learn from countries that have taken the lead, and act decisively now to prevent irreversible damage to nature and to lower dramatically the cost of protecting the planet. In solving one crisis, we should not ignore another.”
The US in particular continues to lag behind other wealthy nations, while Australia, Italy and Japan join them on the net negative side, owing largely to the support they provide to existing environmentally intensive sectors.
Emerging economies most dependent on environmentally intensive sectors, and without strong regulatory oversight already in place, have the biggest task to turn their stimulus green, the report states, but have so far failed to step up.
China, India and Mexico have announced stimulus measures that will damage the environment, while stimulus funding announced by South Africa and Russia largely reinforces the existing damaging impacts of their environmentally intensive sectors.
Denmark was found to be leading on green efforts, with stimulus measures targeted towards energy efficiency, green R&D and a dedicated nature and biodiversity allocation.
The UK fared better than most countries analysed, due to the £1.8bn bailout for Transport for London as well as a £4.5bn investment in transport infrastructure. The government also announced its ‘Ten Point Plan for a Green Industrial Revolution’ in November which promised £12bn for green measures. At the time, the Labour Party criticised the plan, saying that only £4bn of that figure was actually new funding.
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