The COVID-19 pandemic has had a devastating impact on lives and economies around the world. However, it has briefly allowed us to experience cleaner air and reduced emissions and it is with this image in mind that we must move forward. As the world looks to reopen, governments have designed stimulus packages to reboot their economies. Europe has traditionally led the world in tackling the climate crisis and it has again created the blueprint for a global green recovery post- COVID-19. How can the rest of the world learn?
It has generally been accepted that the world should plan for a green, equitable and resilient future. It has also been shown that doing so will be economically beneficial for the global economy; a report by the International Renewable Energy Agency (IRENA) released in April shows that renewable energy could power economic growth and a green economy post-COVID-19 by spurring global GDP gains of US$98 trillion between now and 2050.
The fact that renewables are now cheaper than coal in most countries makes a compelling case for diverting investments on coal towards speeding up the adoption of renewable energy. Further, in early September, a report by the EEA, the EU environment agency, found that 13% of all deaths in the bloc can be linked to pollution, specifying that air and noise pollution, as well as poor water quality and exposure to chemicals, contributes. Meanwhile, the WHO has identified the climate crisis as a major cause of infectious diseases and antimicrobial resistance, raising the risk of future pandemics.
Besides improving air pollution, a renewables-driven recovery will contribute to a more equitable and inclusive growth by improving access to energy, which will benefit the most disadvantaged communities.
Europe and the EU has shown its commitment to a green recovery post-COVID-19 by setting aside 25% of its €750 billion recovery package for building energy-efficient infrastructure, investing in renewables and other clean technology, such as batteries, clean hydrogen and carbon capture technology, promoting low-carbon mobility and installing 1 million electric vehicle charging points, encouraging sustainable land use and preserving biodiversity. It is also considering implementing a border tax on carbon-heavy imports from other countries.
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Digging deeper into the package, the stimulus aims to double the annual renovation rate of the existing building stock; retrofitting old buildings can quickly stimulate the economy while also reducing carbon emissions and saving property owners on their electric bills. Further, investing in energy efficiency creates 2.3 times more jobs per dollar than investing in fossil fuels.
Regarding electric vehicles, the upfront purchase costs of large electric vehicles in the EU are expected to be competitive with traditional vehicles without subsidies by 2022. Support from this stimulus package could bring this date closer.
The EU package also proposes an increase of USD$16 billion for a fund that supports rural agricultural development and sustainability. Specifically, it aims for a 50% reduction in pesticides and antimicrobials, a 20% reduction in fertiliser use, a 50% reduction in food waste, a shift to healthier diets, improvements to fisheries management and aquaculture. However, care should be taken to enhance overall agricultural productivity to avoid the need to convert natural ecosystems to farms.
Finally, the stimulus package would support workers and communities affected by this energy transition by investing $44 billion in the EU’s Just Transition Fund. This will support workers who lose their jobs, help teach them new skills and help small businesses.
This is very encouraging, especially in contrast to the multi-trillion dollar stimulus packages passed in countries like the US and Japan that have included no considerations for the climate crisis.
In addition, some individual nations are announcing their own green stimuli. France has made an $11 billion bailout for Air France conditional on the airline halving its domestic emission levels by 2024, while Denmark plans to spend $4 billion on green renovations to social housing and the UK has set up a $44 billion Clean Growth Fund for research and development in green technologies. Germany has set aside at least €40 billion for climate-related spending of its massive planned €130 billion stimulus package. Initiatives include boosting electric vehicle sales, improving building energy efficiency, enhancing public transport networks, developing hydrogen infrastructure and shifting the cost of renewables subsidies onto general taxation.
What are the Benefits of Green Recovery Spending?
The EU economic recovery proposal says that achieving emissions reduction and energy targets could add 1% to the EU’s GDP and create almost 1 million new green jobs over the next decade.
It is important that other governments follow Europe and adopt a policy and investment response that is geared towards a sustainable, just and green COVID-19 recovery. Corporates also need to adopt sustainable and clean business practices while investors should decarbonise their portfolios and back the renewables sector. Further, civil society must actively support plans for a green and just recovery by adopting sustainable lifestyles.
As the world restarts its economies, we owe it to our future generations to choose the right path and opt for a low-carbon development model.
Featured image by: Flickr