Pandemic stimulus funding could have been used to address climate crisis

In response to the dire circumstances surrounding the COVID-19 pandemic, countries pledged around $13 trillion in stimulus packages to help economic recovery. However, of this large sum of money that could have been used to restructure economies in a more visionary manner, only six percent of it was invested in projects that address climate change issues. 

This is the finding of a Johns Hopkins University study, details of which are published today in the journal Nature. The authors analyzed over $13 trillion in COVID-19-related stimulus packages from 19 countries and the European Union, and found that the vast majority of recovery spending didn’t address climate issues at all. Moreover, three percent of the money went to support projects that are likely to increase greenhouse gas emissions.  

“These economic recovery packages provided an opportunity for countries, including the United States, to really envision what they want their economies to look like going forward,” said co-author Scot Miller, an assistant professor of environmental health and engineering at Johns Hopkins. “The pandemic could have been an opportunity to push countries toward greener economies and a lot of governments have failed to do so.”

The team of scientists analyzed each nation’s stimulus policy from the beginning of the pandemic in 2020 to well into 2021, identifying the percentage of funds allocated to projects that would lower greenhouse gas emissions, those that would increase them and those that would have no impact. The six percent of recovery funding that did support emission-reducing projects was invested in activities such as the development of electric vehicles and transit infrastructure, building energy efficient homes and offices, and carrying out research into renewable energy. 

“Even though this was a public health crisis, in principle governments could have intervened in the economy in a way that changed everything, getting together to do something really big to meet the climate challenge,” said lead author Jonas Nahm, assistant professor of energy, resources, and environment at Johns Hopkins’ School of Advanced International Studies. “But the vast majority of the money spent has very tenuous relations to emissions so it was, overall, very disappointing.”

The team found that of green stimulus measures, only about 27 percent would directly reduce greenhouse emissions. The remaining approximately 72 percent would have only an indirect impact; these included projects like subsidies for biofuel producers in Brazil, or funding in Germany to aid the construction of electric vehicle charging stations.

South Korea and the European Union each devoted 30 percent of their stimulus money to funding green projects, while Brazil, Germany and Italy invested more than 20 percent. France spent ten percent of its recovery money on green projects, but the majority of countries, including the United States, Japan, Russia, and the United Kingdom, paid almost no attention to climate-related projects and spent less than five percent of their stimulus packages in this area. 

Governments clearly did not prioritize climate protection over economic growth in the attempts to recover from the devastating effects of the COVID-19 pandemic. This is common during economic downturns, the authors say, yet stimulus spending during recessions offers an opportunity to combine climate and economic objectives. In the aftermath of the 2009 recession, for instance, 16% of global stimulus spending targeted emissions-reducing activities.

The trillions of dollars pledged by countries around the world to stimulate economic recovery were spent, instead, mainly on unconditional checks issued to individuals and businesses. They could have been invested in technology, infrastructure, and research and development to meet the climate goals of the Paris Agreement, creating jobs and economic recovery along the way.  Signatories to the Agreement have 2030 deadlines to meet concerning interim emissions goals, and recovery funding could have been used to support their attempts to reach these targets. 

“If there was ever an opportunity to tie economic recovery with these climate goals that are drawing closer by the day, this would have been the time to do it,” Miller said. “In the months and years ahead, we shouldn’t forget about climate and greenhouse gas emissions goals when devising economic recovery measures. These 2030 climate goals are coming faster and sooner than we think and we can’t put off thinking about climate change until the pandemic is over.”

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By Alison Bosman, Earth.com Staff Writer