Of the recovery bills approved by global governments during the peak of the pandemic, little focused on a green recovery. Most were attentive to quick-acting programs to protect jobs and to ensure the survival of businesses.
Now that COVID-19 has been at least partially contained, the short-term programs are being reviewed and the long-term stimulus programs are being debated and approved. As governments grapple with how best to stimulate their economies, some have already taken steps to divert significant sums to green investment. While there is a strong environmental rationale to this, as well as a deeply connected reduction in long-term financial risk, there is also evidence that investment in the green economy is a good method of stimulating well-paid jobs.
Recent analysis from Ernst & Young, looking specifically at Australia, outlined that investment in clean energy would create more than 100,000 direct jobs, nearly three times as many jobs for every dollar spent on fossil fuel developments, a riposte to the current discussions on making gas the central pillar for a recovery program. Similarly for the US, the green economy is one of the largest employers, providing nearly 9.5m jobs vs. the 900,000 in the fossil fuel industry according to a study by University College London. Furthermore, according to the Brookings Institution, mean hourly wages for American clean energy workers exceeded national averages by 8-19%.
However, as politics takes hold and the Australian and the US governments continue to debate the relative merit of stimulating fossil fuels or renewable energy progress is, fortunately, being made elsewhere.
In the EU, the proposed €750bn stimulus plans are being deliberated by member states and could include as much as €100bn for efforts to green the economy by 2050. The plan would require governments to use the funds only for projects that would be in line with the Green Deal and the EU goal of climate neutrality by 2050.
Germany announced a €130bn stimulus program in early June with two notable elements to stimulate green industries. Despite much pressure to provide incentives for buyers of petrol and diesel cars as had been done in 2008, these proposals fell by the wayside, replaced by a doubling of the subsidy for electric vehicles – now €6,000 for a car that costs up to €40,000. In addition, a €50bn ‘future package’ of investment has been agreed which focuses on greening the economy, to be spent on expanding the charging infrastructure for electric vehicles, cap the renewables surcharge customers were spending for expansion of renewable energy and the development of hydrogen production capacity.
In China at the recent National People’s Congress President Xi Jinping emphasized the need to push forward initiatives which prioritise ecology and highlights green development. While there is also continued investment and opening of coal power capacity, there have also been positive initiatives announced. An extension of subsidies for EVs was announced a few months ago, and $1.4bn is committed to expanding the EV charging network by 50% in 2020, adding a total of 600,000 new charging points. In addition this week, China announced a 7.5% increase in subsidies for renewable energy, within which the solar industry incentives will increase by 14%.
And finally in South Korea, the recently reelected government has approved a stimulus package with a significant investment in the ‘New Green Deal’, accelerating the country to be the only Asian country committed to reaching net-zero emissions by 2050. The program includes investment in renewable energy, an introduction of a carbon tax, and the phasing out of domestic and overseas coal financing by public sector institutions.
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