A report by Oxford University’s Economic Recovery Project (OUERP) has found that less than one fifth of Covid recovery spending by the world’s governments can be considered ‘green’.
The report, ‘Are We Building Back Better? Evidence from 2020 and Pathways for Inclusive Green Recovery Spending’, was led by Brian O’Callaghan of Oxford’s Smith School of Enterprise and the Environment. This was in conjunction with the UN Environment Programme (UNEP), and was launched alongside the Global Recovery Observatory, which provides a database of global recovery spending.
The most comprehensive analysis of COVID-19-related fiscal rescue and recovery efforts by 50 leading economies to date, the report reveals that only $368bn of $14.6tn COVID-induced spending in 2020 was green.
The report summary states: “Despite considerable evidence suggesting that environmentally restorative fiscal policies may be among the most effective tools for economic recovery, very little green spending of this kind was announced in 2020.”
It adds, “With growing climate instability, rising inequality, and worsening global poverty (World Bank, 2021), it is crucial that governments build back better through a green and inclusive recovery.”
The report’s headline graph shows the percentage of green recovery spending in some of the world’s leading economies, alongside their recovery spending as a percentage of GDP.
It finds that countries such as the UK, China and Japan have green recovery spending that amounts to less than 20% of total recovery spending from Covid-19; meanwhile, the USA, which has so far pledged far less recovery spending than many other countries, has devoted less than 30% of recovery spending on green programmes. Some of the countries in the ‘current leaders’ quadrant of the graph include Finland, Denmark, Norway and Germany, whose green recovery spending as a percentage of their total is over 50%.
The report also notes some of the major ‘green’ fields into which governments are, and might continue, investing in. This includes low carbon energy, green transport, green building upgrades, regeneration and reforestation, and green research and development. Of these categories, green transport has seen the greatest announced investment so far, with $86.1 billion set to be invested in projects such as “electric vehicle transfers and subsidies, investments in public transport, cycling and walking infrastructure”.
Ultimately, however, in response to the question ‘Are we building back better?’ the answer so far is “not yet.” The report argues that “Though some promising green recovery policy examples do exist, they have been overwhelmingly implemented by a small group of wealthy countries.”
Nonetheless, it adds that the recovery from Covid-19 “presents perhaps the greatest chance we have had so far to redirect the course of human greenhouse gas emissions and align spending with the goals of the 2030 Agenda.”
The report’s summary concludes: “The choice for policy makers is clear: make use of recovery spending to steer away from the worst impacts of climate change and inequality, or reinforce existing carbon-intensive systems and lock in a future that is economically, socially, and environmentally unsustainable.”
At a launch event on Wednesday, the report’s lead author, Brian O’Callaghan, explained the key findings, and was joined on a panel by the economist and Nobel laureate, Professor Joseph Stiglitz; Inger Andersen, Executive Director of the UNEP; Dr. Kristalina Georgiva, IMF Managing Director; and Svenja Schulze, Germany’s Minister of the Environment.
O’Callaghan said: “Despite positive steps towards a sustainable COVID-19 recovery from a few leading nations, the world has so far fallen short of matching aspirations to build back better. But opportunities to spend wisely on recovery are not yet over. Governments can use this moment to secure long-term economic, social, and environmental prosperity.”
Professor Cameron Hepburn, Director of the Smith School, also spoke at the event, to announce the launch of the Global Recovery Observatory.
The Observatory is a freely-accessible research tool intended for use by the public and governments, which provides data on the green recovery spending of the world’s 50 leading economies.
The tool measures each recovery policy on its relative ‘greenness’ based on potential long and short-term greenhouse gas emissions, air pollution, natural capital, quality of life, inequality and rural livelihood factors.
For instance, it finds that of the $381bn Covid recovery spending announced by the UK government, only 17% of this recovery spending is green.
Professor Hepburn added: “This report is a wake-up call. The data from the Global Recovery Observatory show that we are not building back better, at least not yet. We know a green recovery would be a win for the economy as well as the climate – now we need to get on with it.”
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