Green recovery packages are proposed environmental, regulatory, and fiscal reforms to rebuild prosperity in the wake of an economic crisis, such as the COVID-19 pandemic or the Global Financial Crisis (GFC). They pertain to fiscal measures that intend to recover economic growth while also positively benefitting the environment, including measures for renewable energy, efficient energy use, nature-based solutions, sustainable transport, green innovation and green jobs, amongst others. [1] [2] [3] [4]
Support for a green recovery in response to the COVID-19 pandemic has come from multiple political parties, governments, activists, and academia across the globe. [5] [6] Following similar measures in response to the GFC, [7] a key goal of the packages is to ensure that actions to combat recession also combat climate change. These actions include the reduction of coal, oil, and gas use, clean transport, renewable energy, eco-friendly buildings, and sustainable corporate or financial practices. Green recovery initiatives are supported by the United Nations (UN) and the Organisation for Economic Co-operation and Development (OECD). [8] Several global initiatives have provided live tracking of national fiscal responses, including the Global Recovery Observatory (from Oxford University, the UN, and the International Monetary Fund (IMF)), [9] the Energy Policy Tracker, [10] and the OECD's Green Recovery Tracker. [11]
Delineating between rescue and recovery investment, in March 2021 analysis by the Global Recovery Observatory found that 18% of recovery investment and 2.5% of total spending was expected to enhance sustainability. [1] In July 2021, the International Energy Agency supported that analysis, noting that only around 2% of economic bailout money worldwide was going to clean energy. [12] According to a 2022 analysis of the $14tn that G20 countries spent as economic stimulus, only about 6% of pandemic recovery spending was allocated to areas that will also cut greenhouse-gas emissions, including electrifying vehicles, making buildings more energy efficient and installing renewables. [13]
Since the industrial revolution, the burning of coal, oil, and gas has released millions of tons of carbon dioxide, methane, and other greenhouse gases into the atmosphere, causing anthropogenic climate change. By 2020, the Earth's average temperature was 1 °C higher than pre-industrial levels.[ citation needed ] The UN Intergovernmental Panel on Climate Change (IPCC) calculated in its 2014 Synthesis Report that relative to the period of 1850-1900, the end of the 21st century (2081-2100) could see global mean surface temperature increase of 1.5-2.5°C. [14] Burning a fraction of fossil fuel reserves will therefore lead to dangerous planetary heating, resulting in widespread crop failures, and the 6th mass extinction event. [15]
By the end of 2019, increasing incidents of wild fires in Australia, the Amazon rainforest in Brazil, and the Arctic forests in Russia had been reported, [16] as well as increased risks of hurricanes in the United States and Caribbean, and flooding.[ citation needed ] In 2015, most countries signed the Paris Agreement committing to limit global carbon emissions to prevent temperature rises by over 2°C, with an ambition to limit temperature rise to 1.5°C. Activists and politicians, particularly younger people, demanded a "Green New Deal" in the US, [17] a Green Industrial Revolution in the UK, and to end the use of fossil fuels in transport, energy generation, agriculture, buildings, and finance. In late 2019, the EU announced a European Green Deal, although this was said to fall far short of the goal of ending fossil fuel use in the bloc by 2050. [18]
In early 2020, the COVID-19 pandemic caused countries to lock down their economies, in an attempt to prevent infections and deaths. This required many businesses to suspend work, as people travelled less, shopped less, and stayed at home to work more. In most countries, this caused job losses. The fall in economic activity also caused a fall in greenhouse gas emissions. [19] [20] This drove groups to call for, and politicians and governments to promise, a green recovery.
In earlier discourses, the positive side effects of green policies have been termed co-benefits. According to the IPCC, co-benefits are "the positive effects that a policy or measure aimed at one objective might have on other objectives, without yet evaluating the net effect on overall social welfare". [21] Renewable energies can boost employment and industrial development. Depending on the country and the deployment scenario, replacing coal power plants with renewable energy can more than double the number of jobs per average MW capacity (albeit, this represents a concomitant 50% productivity loss). [22] Besides economic effects, climate mitigation strategies can provide health-related co-benefits. Solar mini-grids can improve electricity access for rural areas [23] and the replacement of coal-based energy with renewables can lower the number of premature deaths caused by air pollution. [24]
Proposals for a green recovery vary widely.
In the United States, a group of academics and activists introduced "a green stimulus to rebuild our economy" in March 2020. [25] [26] The policies targeted eight fields: housing and civic infrastructure, transportation, labour and green manufacturing, energy generation, food and agriculture, environment and green infrastructure, innovation policy, and foreign policy. The requested funding level was set at 4% of the US GDP, or around $850 billion a year, until the dual achievement of full decarbonisation and an unemployment rate below 3.5%. [25] [26]
Over the spring of 2021, US President Biden introduced his American Jobs Plan and American Families Plan, which incorporated green recovery principles including investments in carbon capture and storage, clean energy, and a Civilian Climate Corps similar to the Depression-era Civilian Conservation Corps. Progressives criticised the plans as not ambitious enough. [27] [28] [29] [30]
In the UK, the government proposed "a green and resilient recovery," and announced £3 billion in funding for building renovations in July 2020. [31] By contrast, in early July, an academic and think tank group proposed a "Green Recovery Act" that targeted nine fields: transport, energy generation, agriculture, fossil fuels, local government, international agreement, finance and corporate governance, employment, and investment. [32] This established duties on all public bodies and regulators to end the use of fossil fuels "as fast as technologically practicable," with strict exceptions if absent technical alternatives. [32] [33]
In June 2020, the German government pledged a green recovery with funding of €40 billion as part of a €130 billion recovery package. [34]
In July 2020, the European Council agreed to a recovery fund of €750 billion, branded Next Generation EU (NGEU). An overall climate target of 30% would apply to the total amount of expenditure from the NGEU in compliance with the Paris climate agreement. [35]
A comprehensive plan has been proposed to help Africa recover from the COVID-19 crisis and address the challenges of climate change. The plan focuses on key areas such as food security, water access, and resilient infrastructure. By empowering female farmers, leveraging technology, improving water governance, and investing in sustainable infrastructure, Africa can become more resilient and prosperous. Learning from past pandemics, it is crucial to take a fresh approach and prioritize sustainable investments for a better future. Implementing these recommendations will create a stronger Africa, capable of tackling future challenges and achieving economic recovery. [36]
In February 2021, commentators such as the Council on Foreign Relations noted that other major economies such as China, India, and the European Union had begun "implementing some of the policies envisioned by the Green New Deal." [37] [38]
A July 2021 update to the World Scientists' Warning to Humanity found that 17% of COVID-19 recovery investments funds that had reportedly been allocated to a green recovery as of March 2021 to be insufficient. [39] They warned that climate policies should be part of COVID-19 recovery. They demanded that plans address root causes and that immediate, drastic reductions in greenhouse gases be prioritised. [40] [39]
According to a 2021 analysis by the Overseas Development Institute, China could do more to support a green recovery in developing countries. [41]
Economic growth has been a key driver of CO2 emissions. [42] Economic growth may also drive technological change and increase energy efficiency. Economic growth typically requires investment. Investment in energy-intensive sectors, specifically carbon energy sources, can strengthen the link between economic growth and emissions. If the investment is in clean energy the relationship can be the reverse. Investment in less energy-related sectors, such as the services sector, then the link may be tenuous. [ citation needed ]
The "environmental Kuznets curve" (EKC) hypothesis posits that at early stages of development, pollution per capita and GDP per capita move in the same direction. Beyond a certain income level, emissions per capita decrease as GDP per capita increases, thus generating a U-shaped relationship between GDP per capita and pollution. One study concluded that the econometrics literature did not support either an optimistic or a pessimistic interpretation of the hypothesis. Instead, it suggested some degree of flexibility between economic growth and emissions growth.[ citation needed ]
Digital technologies are important in achieving the green transition and the European Green Deal's environmental targets.[ citation needed ] Emerging digital technologies, if correctly applied, have the potential to play a critical role in addressing environmental issues. Smart city mobility, precision agriculture, sustainable supply chains, environmental monitoring, and catastrophe prediction are just a few examples. [43] [44]
Digitally advanced companies put more money into energy-saving strategies. In the EU, 59% of companies that have made investments in both basic and advanced technologies have also invested in energy efficiency measures, compared to only 50% of US firms in the same category. Overall, there is a significant disparity between businesses' digital profiles and investments in energy efficiency. [43]
Comparing the Green New Deal to the Biden Plan for a Clean Energy Revolution And Environmental Justice, one might think they were written by the same person
Mr Johnson has talked of a "new deal" and he could take up the suggestion by the Common Wealth think tank to legislate for a green recovery act to drive an economic revival with renewable energy at its core.
major world economies, including China, India, and the European Union, have begun implementing some of the policies envisioned by the Green New Deal,
Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and private physical structures such as roads, railways, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications. In general, infrastructure has been defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions" and maintain the surrounding environment.
A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more politically applied focus. The 2011 UNEP Green Economy Report argues "that to be green, an economy must not only be efficient, but also fair. Fairness implies recognizing global and country level equity dimensions, particularly in assuring a Just Transition to an economy that is low-carbon, resource efficient, and socially inclusive."
Energy is sustainable if it "meets the needs of the present without compromising the ability of future generations to meet their own needs." Most definitions of sustainable energy include considerations of environmental aspects such as greenhouse gas emissions and social and economic aspects such as energy poverty. Renewable energy sources such as wind, hydroelectric power, solar, and geothermal energy are generally far more sustainable than fossil fuel sources. However, some renewable energy projects, such as the clearing of forests to produce biofuels, can cause severe environmental damage.
Climate change mitigation is action to limit climate change. This action either reduces emissions of greenhouse gases or removes those gases from the atmosphere. The recent rise in global temperature is mostly due to emissions from burning fossil fuels such as coal, oil, and natural gas. There are various ways that mitigation can reduce emissions. These are transitioning to sustainable energy sources, conserving energy, and increasing efficiency. It is possible to remove carbon dioxide from the atmosphere. This can be done by enlarging forests, restoring wetlands and using other natural and technical processes. The name for these processes is carbon sequestration. Governments and companies have pledged to reduce emissions to prevent dangerous climate change. These pledges are in line with international negotiations to limit warming.
The politics of climate change results from different perspectives on how to respond to climate change. Global warming is driven largely by the emissions of greenhouse gases due to human economic activity, especially the burning of fossil fuels, certain industries like cement and steel production, and land use for agriculture and forestry. Since the Industrial Revolution, fossil fuels have provided the main source of energy for economic and technological development. The centrality of fossil fuels and other carbon-intensive industries has resulted in much resistance to climate friendly policy, despite widespread scientific consensus that such policy is necessary.
Business action on climate change includes a range of activities relating to climate change, and to influencing political decisions on climate change-related regulation, such as the Kyoto Protocol. Major multinationals have played and to some extent continue to play a significant role in the politics of climate change, especially in the United States, through lobbying of government and funding of climate change deniers. Business also plays a key role in the mitigation of climate change, through decisions to invest in researching and implementing new energy technologies and energy efficiency measures.
The energy policy of the European Union focuses on energy security, sustainability, and integrating the energy markets of member states. An increasingly important part of it is climate policy. A key energy policy adopted in 2009 is the 20/20/20 objectives, binding for all EU Member States. The target involved increasing the share of renewable energy in its final energy use to 20%, reduce greenhouse gases by 20% and increase energy efficiency by 20%. After this target was met, new targets for 2030 were set at a 55% reduction of greenhouse gas emissions by 2030 as part of the European Green Deal. After the Russian invasion of Ukraine, the EU's energy policy turned more towards energy security in their REPowerEU policy package, which boosts both renewable deployment and fossil fuel infrastructure for alternative suppliers.
A low-carbon economy (LCE) or decarbonised economy is an economy based on energy sources that produce low levels of greenhouse gas (GHG) emissions. GHG emissions due to human activity are the dominant cause of observed climate change since the mid-20th century. Continued emission of greenhouse gases will cause long-lasting changes around the world, increasing the likelihood of severe, pervasive, and irreversible effects for people and ecosystems. Shifting to a low-carbon economy on a global scale could bring substantial benefits both for developed and developing countries. Many countries around the world are designing and implementing low-emission development strategies (LEDS). These strategies seek to achieve social, economic, and environmental development goals while reducing long-term greenhouse gas emissions and increasing resilience to the effects of climate change.
Renewable energy commercialization involves the deployment of three generations of renewable energy technologies dating back more than 100 years. First-generation technologies, which are already mature and economically competitive, include biomass, hydroelectricity, geothermal power and heat. Second-generation technologies are market-ready and are being deployed at the present time; they include solar heating, photovoltaics, wind power, solar thermal power stations, and modern forms of bioenergy. Third-generation technologies require continued R&D efforts in order to make large contributions on a global scale and include advanced biomass gasification, hot-dry-rock geothermal power, and ocean energy. In 2019, nearly 75% of new installed electricity generation capacity used renewable energy and the International Energy Agency (IEA) has predicted that by 2025, renewable capacity will meet 35% of global power generation.
Fossil fuel phase-out is the gradual reduction of the use and production of fossil fuels to zero, to reduce deaths and illness from air pollution, limit climate change, and strengthen energy independence. It is part of the ongoing renewable energy transition, but is being hindered by fossil fuel subsidies.
Green growth is a concept in economic theory and policymaking used to describe paths of economic growth that are environmentally sustainable. It is based on the understanding that as long as economic growth remains a predominant goal, a decoupling of economic growth from resource use and adverse environmental impacts is required. As such, green growth is closely related to the concepts of green economy and low-carbon or sustainable development. A main driver for green growth is the transition towards sustainable energy systems. Advocates of green growth policies argue that well-implemented green policies can create opportunities for employment in sectors such as renewable energy, green agriculture, or sustainable forestry.
The economics of climate change mitigation is part of the economics of climate change related to climate change mitigation, that is actions that are designed to limit the amount of long-term climate change.
Green New Deal (GND) proposals call for public policy to address climate change along with achieving other social aims like job creation, economic growth and reducing economic inequality.
Climate change in Europe has resulted in an increase in temperature of 2.3 °C (2022) in Europe compared to pre-industrial levels. Europe is the fastest warming continent in the world. Europe's climate is getting warmer due to anthropogenic activity. According to international climate experts, global temperature rise should not exceed 2 °C to prevent the most dangerous consequences of climate change; without reduction in greenhouse gas emissions, this could happen before 2050. Climate change has implications for all regions of Europe, with the extent and nature of impacts varying across the continent.
Climate finance are funding processes for investments related to climate change mitigation and adaptation. The term has been used in a narrower sense to refer to transfers of public resources from developed to developing countries, in light of their UN Climate Convention obligations to provide "new and additional financial resources". In a wider sense, the term refers to all financial flows relating to climate change mitigation and adaptation.
An energy transition is a significant structural change in an energy system regarding supply and consumption. Currently, a transition to sustainable energy is underway to limit climate change. It is also called renewable energy transition. The current transition is driven by a recognition that global greenhouse-gas emissions must be drastically reduced. This process involves phasing-down fossil fuels and re-developing whole systems to operate on low carbon electricity. A previous energy transition took place during the industrial revolution and involved an energy transition from wood and other biomass to coal, followed by oil and most recently natural gas.
Co-benefits of climate change mitigation are the benefits related to mitigation measures which reduce greenhouse gas emissions or enhance carbon sinks.
The European Green Deal, approved in 2020, is a set of policy initiatives by the European Commission with the overarching aim of making the European Union (EU) climate neutral in 2050. The plan is to review each existing law on its climate merits, and also introduce new legislation on the circular economy, building renovation, biodiversity, farming and innovation.
The COVID-19 pandemic has had an impact on the environment, with changes in human activity leading to temporary changes in air pollution, greenhouse gas emissions and water quality. As the pandemic became a global health crisis in early 2020, various national responses including lockdowns and travel restrictions caused substantial disruption to society, travel, energy usage and economic activity, sometimes referred to as the "anthropause". As public health measures were lifted later in the pandemic, its impact has sometimes been discussed in terms of effects on implementing renewable energy transition and climate change mitigation.
Sustainable Development Goal 13 is to limit and adapt to climate change. It is one of 17 Sustainable Development Goals established by the United Nations General Assembly in 2015. The official mission statement of this goal is to "Take urgent action to combat climate change and its impacts". SDG 13 and SDG 7 on clean energy are closely related and complementary.
