‘Greta was right’: Trio of reports warns world at risk of squandering green recovery opportunity

Major new reports warn governments are failing to seize the huge benefits that would flow from major green stimulus plans and fossil fuel subsidy reform

Greta Thunberg’s accusation that world leaders are guilty of ‘blah, blah, blah’ in the face of the escalating climate crisis is ‘spot on’, according to a trio of new reports released today, which warn the opportunity provided by the coronavirus crisis to introduce sweeping fossil fuel subsidy reform and ambitious green stimulus packages is being squandered.

The first analysis from the Green Economy Coalition, which was launched today, studied 32 countries and found that two-thirds have no or minimal green recovery policies in place. The report found that around $11.1tr of economic support has been mobilised in respond to the coronavirus crisis, but “only a small handful of rich countries are investing in a green economy as they emerge from the pandemic”. 

It concluded that Sweden, France, and now Spain are leading the race for a green recovery with their recovery plans dedicating at least 40 per cent of total funding towards low carbon infrastructure, applying environmental conditions to carbon-heavy industry bailouts, and creating green jobs programmes for the long-term unemployed. 

But the alliance of NGOs, academic institutions, and think tanks, argued that “even these leaders are preoccupied with  one-off low-carbon projects and are shying away from the urgent structural changes needed to protect and restore nature at scale – including eliminating harmful subsidies and embedding biodiversity in economic plans”. 

Meanwhile, other high income countries such as Australia and Japan are falling far behind their economic peers by largely sidelining low carbon infrastructure in their economic recovery plans. And middle and lower income countries are struggling to even begin greening their recoveries as they wrestle with mounting debt and difficulties accessing vaccines.  

“The global green recovery is failing to respond to the code red that people and nature are facing,” said Oliver Greenfield, Convenor of the Green Economy Coalition. “The political class of 2021 are throwing us out of the COVID-19 frying pan and into the climate fire.”

The report concluded that Thunberg’s accusations that politicians are making empty promises to ‘build back better’ or kick start a ‘green economy’ in the wake of COVID-19 are well founded. 

“Green recovery plans by a handful of countries aren’t going to be enough,” said Andrew Norton, Director of the International Institute for Environment and Development, and co-founder of the Green Economy Coalition. “We need to prioritise green economic policies across the board and when it comes to low income countries they will need financial support to do that. Justice demands that those who have done least to cause the climate crisis are given the help they need to play a part in the solution.”

The UK ranks just outside the top tier of nations assessed by the report, having introduced a number of green stimulus measures and pushed through new targets for phasing out internal combustion engine cars in the midst of the pandemic. However, the government continues to face criticism for failing to match the level of green funding mobilised by some of its European neighbours and come forward with a comprehensive net zero strategy. Ministers are expected to unveil a new economy-wide net zero plan ahead of COP26, but the Green Economy Coalition report came on the same day as Prime Minister Boris Johnson delivered a speech to the Conservative Party Conference in which he made no new policy announcements and provided scant detail on how the UK can engineer a green recovery.

The report calls for governments to redouble financial support to low income and debt-stressed countries, prioritising those that are doing credible green recovery planning; ramp up investment in biodiversity and natural capital in recovery plans by targeting at least 30 per cent of spending on nature-positive investment going forward; and seize the opportunity for wider economic reforms in support of the net zero transition.

“The window for a structural green recovery is open, and all nations should present transformative green investment packages at COP26 to ensure the credibility of their revised nationally determined contributions (NDCs),” the report states.

However, the Green Economy Coalition’s analysis comes on the same day as a new report from the International Monetary Fund (IMF) details how fossil fuel subsidies persist in the form of direct support and a continued failure to price polluting externalities.

The IMF found the production and burning of coal, oil, and gas was subsidised to the tune of $5.9tn in 2020 – or $11m a minute – with no country pricing its fuels sufficiently to reflect their full supply and environmental costs.

Around eight per cent of the subsidy package was provided through direct subsidies that cut fuel prices, while a further six per cent came from tax breaks. However, the analysis also counted the failure to put an appropriate price on pollution as a ‘subsidy’, detailing how 42 per cent of the total support came from the failure to make polluters pay for the deaths and poor health caused by air pollution while a further 29 per cent resulted from the failure to put a price on climate impacts.

In contrast, setting fossil fuel prices that reflect their true cost would cut global carbon emissions by over a third, according to the IMF.

“There would be enormous benefits from [fossil fuel subsidy] reform, so there’s an enormous amount at stake,” Ian Parry, lead author of the IMF report, was quoted as saying by the Guardian. “Some countries are reluctant to raise energy prices because they think it will harm the poor. But holding down fossil fuel prices is a highly inefficient way to help the poor, because most of the benefits accrue to wealthier households. It would be better to target resources towards helping poor and vulnerable people directly.”

However, repeated pledges by the G20 to phase out inefficient fossil fuel subsidies have resulted in scant progress and observers are sceptical that the upcoming G20 Summit in Italy on the eve of the COP26 Summit in Glasgow will deliver a significant breakthrough.

Meanwhile, there was further evidence today of the way in which the failure to deliver comprehensive green recovery packages and push through energy market reforms is making it harder for governments to tap into the huge economic benefits that should flow from a green recovery.

A new report from the Children’s Investment Fund Foundation, Oxford University Economic Recovery Project, and Vivid Economics concluded that a renewed focus on a green economic recovery from COVID-19 would “create more jobs, spur long-term growth, and save lives”.

The analysis investigated three coal-reliant economies in the form of India, Poland, and China, and modelled how greener measures – including reforestation and making buildings more energy-efficient – could yield better economic results than continued investment in coal infrastructure.

“Government responses to COVID-19 have the potential to significantly influence the course of climate change,” said Brian O’Callaghan, lead researcher and project manager at the Oxford University Economic Recovery Project. “Our research suggests that public investment in green initiatives can deliver strong economic returns, and if well targeted, address social inequalities and create a cleaner natural environment. This is particularly true during periods of economic downturn where job creation and economic rejuvenation are of marked importance.”

His comments were echoed by Corina Campian, project lead at the Children’s Investment Fund Foundation, who argued that “a low carbon world will help secure a healthy and prosperous future for today’s children. Evidence to this are the numbers provided in this report, showing the impact that green recovery investments can have on climate, health, and on jobs. This cross-sectoral impact is impossible to ignore”.

The report calculated that if Poland used an additional $1.75bn from the European Commission’s ‘Just Transition’ Fund on green initiatives, it could create 46,000 new jobs and reduce CO2 emissions by two megatons – an approach that would also save lives through improved air quality. Similarly, the report argued that if India allocated as much money to green stimulus measures as the $7.7bn assigned to coal power, it could suffer 34,000 fewer deaths and 56,000 fewer birth complications.

The report argued that investment in ecosystem restoration, renewables, and building upgrades could all maximise job creation, while leading to significant economic and health co-benefits. It also stressed that the analysis of the Polish, Indian, and Chinese economy could be broadly applied to other countries as they work on their own economic recovery packages.

However, for many green businesses and campaigners the fear remains that most governments are responding to these various compelling critiques of the failure to deliver genuinely green recovery packages with little more than ‘blah, blah, blah’.

By James Murray

This article was originally shared by BusinessGreen.