Spending on green economic stimulus is slowly rising, study finds

Of the $14.9 trillion in public stimulus spending to offset the effects of the pandemic, $1.8 trillion is being used for green purposes, the study finds.

A worker walks between solar panels at Centragrid power plant in Nyabira, Zimbabwe, June 23, 2020. REUTERS/Philimon Bulawayo
Strategies to recover from the coronavirus pandemic in many large economies are increasingly taking into account environmental concerns, a new study shows [File: Philimon Bulawayo/Reuters]

Huge amounts of post-pandemic stimulus packages are mostly failing to support action to tackle climate change or halt the loss of biodiversity, but the amount of green spending is slowly rising, according to a study published on Friday.

Advocates of rapid action to slash planet-warming emissions see the packages as a once-in-a-generation opportunity to invest at the scale needed to catalyse a shift to a low-carbon economy in time to avoid catastrophic global warming.

Of a total of $14.9 trillion in stimulus spending announced globally since the coronavirus pandemic began, so far $1.8 trillion is being used to mitigate the effect of polluting sectors such as energy, transport, industry, farming and waste, the report by think-tanks Vivid Economics and Finance for Biodiversity found.

Nevertheless, moves by countries including the United States, Canada, China, Japan and others to support sectors such as renewable energy, electric vehicles or afforestation suggest recovery strategies are becoming more green-tinted, the study shows.

“We are seeing momentum building towards a greener stimulus package, but there’s still a long way to go,” Jeffrey Beyer, an economist at Vivid Economics and co-author of the report, known as the Greenness of Stimulus Index, told the Reuters news agency.

Mixed scorecard

Japan was ranked the top green-stimulus country in Asia after adopting measures designed to boost cleaner energy and transport, although the gains were outweighed by the country’s continued backing for fossil fuels.

China’s score, also weighed down by its support for heavy industry, improved due to plans to expand wind and solar.

Although US spending has so far mostly propped up business as usual, President Joe Biden’s moves to act on climate change and environmental protections since taking office in January have sharply improved the country’s ranking.

Canada’s ranking also gained after the government announced a range of green investments in sectors including energy efficiency and ecosystem restoration.

Source: Reuters