Changing the way we measure economic growth may help redress the balance between nature and exploitation of resources.
A bulk of large economies’ COVID-19 recovery spending is not green, putting the world on track to pouring billions of dollars into reinforcing polluting industries, a new paper from the United Nations and the University of Oxford warned on Wednesday.
Indeed, rescue spending was absolutely critical to providing immediate relief to get health services responding to the surge in demand, and keeping families and businesses afloat, wrote Inger Andersen, executive director of the United Nations Environment Programme (UNEP), in the foreword of the report.
“But [governments] do have choices when thinking about planning recoveries once short-term relief has been provided,” she added.
The coronavirus pandemic has triggered the largest contraction in the global economy since World War II, prompting unprecedented spending by governments to salvage their virus-hit economies.
Many leaders pledged to “build back better” and use relief aid to fight climate change. So far, they are falling short.
Of the $1.9 trillion that the world’s 50 biggest economies announced in COVID-19 recovery spending by the end of 2020, only 18 percent – or $341bn – can be considered green, according to the report.
“In many cases, governments have been playing politics,” report author Brian O’Callaghan, lead researcher at the Oxford University Economic Recovery Project, told Reuters news agency.
“We’ve seen examples of leaders using small green packages to dominate the headlines, while quietly pushing through much larger packages without a comment to their environmental characteristics,” he told Reuters news
Wealthy nations accounted for most green spending, among them Spain, South Korea, Germany and the United Kingdom. The biggest chunk of green funding was for transport, such as electric vehicle subsidies and cycling infrastructure. Low-carbon energy also benefitted, while the United States and China earmarked cash for public parks.
Meanwhile, debt burdens have limited spending in middle-income and developing countries. This trend suggests that going forward, substantial concessional funds from wealthy nations will be essential to fight rising levels of poverty and worsening inequality in those poorer countries, the report said.
Climate change and growing levels of pollution in the environment will continue to remind the world how truly vulnerable the global economy is. Disruptions to the climate will also continue to exacerbate inequality within and between nations as well, the authors warned.
The UNEP and Oxford also spotlighted “a growing body of evidence” that green fiscal spending can deliver stronger economic returns than traditional alternatives.
The report urged wealthy nations to use recovery money to support least-developed countries and marginalised communities, which have been disproportionately affected both by COVID-19-induced deaths and job and income loss.