Green Stimulus Index – An assessment of the orientation of COVID-19 stimulus in relation to climate change, biodiversity and other environmental impacts (Vidid Economics)

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Over the past 2 months the world has witnessed unprecedented government financial interventions in response to Covid-19. Economic stimulus packages announced to date include a range of different bailout mechanisms. Governments have rightly put people first and focused on the immediate implications of the crisis – with the money going directly to households and those on the frontline.

At the same time, roughly USD 840 billion in announced stimulus, 11% of the total, will flow into sectors with high impacts on the environment – whether on climate change, biodiversity or local pollution. The coronavirus shows us that our fate is inextricably linked to that of the natural world, and governments have the opportunity and responsibility to ensure short-term emergency measures lead to a better more resilient future.

The Green Stimulus Index examines 11 major economies to assess the green vs. brown orientation of their stimulus funding based on (1) the scale of funds flowing into environmentally relevant sectors, (2) the existing green orientation of those sectors, and (3) the efforts to steer stimulus toward (or away from) sustainability.

To date, much of this stimulus funding is set to flow into existing sectors with no attempt to look forward and support the medium and long-term sustainability and resilience of these sectors. There remains significant scope for governments to more pro-actively ensure this funding strengthens sustainability and resilience. In countries with inadequate existing climate and biodiversity policies, these flows are likely to reinforce unsustainable trajectories of high emissions and loss of nature. To read the full brief, refer to the Vivid Economics website.