Thursday

7th Jul 2022

Study: Green post-virus stimulus is 'life or death'

  • Projects on clean energy infrastructure can create twice as many jobs as fossil-fuel projects, the Oxford University study found (Photo: Greenpeace Polska)

Green stimulus for projects that cut emissions and restore economic growth offer higher returns on public spending in the short and long term than traditional short-run fiscal incentives, a study from Oxford University revealed.

Projects on clean energy infrastructure, for instance, are expected to create twice as many jobs as fossil fuel projects, while driving down costs of the clean energy transition in the long run.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"Green fiscal recovery packages can act to decouple economic growth from GHG [greenhouse gas] emissions and reduce existing welfare inequalities that will be exacerbated by the pandemic in the short-term and climate change in the long-term," says the study published this week.

Oxford's study, co-written by the Nobel prize-winning economist Joseph Stiglitz, analysed over 300 policies implemented by G20 countries and identified that the vast majority of them have focused on increasing liquidity in global markets - mostly without green conditions attached.

Their assessment states that four percent of these policies are 'green' and have the potential to reduce long-run emissions, four percent are 'brown' and likely to increase emission, and 92 percent are 'colourless', since they maintain the status quo.

However, the scientific community has repeatedly warned that keeping 'business as usual' would increase global temperatures over three degrees, leading to future uncertainty, economic instability and climate catastrophes.

This might be why the study points out that state aid and bailouts for emissions-intensive firms, such as airlines, must be subjected to measurable conditions towards a net-zero emissions future.

"The emergency rescue packages that are currently being implemented represent life and death decisions made by government officials about people alive today, [but also] about future generations," warns the report, which also flags up that countries this time have clear framework under the Paris Agreement.

Yet, the results from a survey of more than 200 central bankers, G20 finance minsters, and top academics included in Oxford's study suggest that, in many cases, experts think that climate-friendly policies also offer a better economic picture.

Hence, these findings support the recent calls for a "green recovery" made by politicians, business leaders, some MEPs and environmental activists.

'Green' vs 'Brown'

The European Commission is set to unveil in the next weeks the updated long-term budget proposal for the period 2021-2027, including a recovery fund to overcome the negative impact of coronavirus on the EU's economy.

The commission president Ursula von der Leyen promised to examine "innovative financial instruments in the next budget" and make the Green Deal and digital transformation the core of the EU's recovery plan.

Following that approach, the think tank Institute for European Environmental Policy pointed out that an additional €381bn of revenues in "pollution dividends" could be generated to support the EU's recovery.

These further revenues could be driven from a carbon border-adjustment tax, a plastic tax, a pesticides tax or a tax on the extraction of primary material, although the most "promising" way to generate additional own resources for the EU's budget would be through the Emissions Trading System - in which polluters pay to offset the harm done.

The president of the European Parliament, David Sassoli, on Wednesday (6 May) called on the EU institutions to "not lose sight of long-term investments and strategic objectives".

"Members had set very ambitious targets before the current crisis. Now is not the time to lower our ambitions and settle for a plan and a budget that would not be up to the challenges ahead," Sassoli said, referring the 2050 climate neutrality commitment.

Next week, the parliament will adopt in plenary a resolution on the recovery plan.

EU alliance calls for green recovery plan

Some 180 European politicians, business leaders, MEPs and environmental activists have called for green recovery investment packages to develop "a new model of prosperity" after the pandemic ends.

How pandemic opens doors to green transport industry

While much of the transport sector is pushing for unconditional state aid and to postpone climate policy action, experts believe that this crisis could help to transform the EU's transportation system, making it more resilient, sustainable and flexible.

EU 'failing' on climate and gender equality

A new report on the EU's progress on the United Nations' sustainable development goals reveals the bloc is struggling on both climate change and gender inequality.

Column

'War on Women' needs forceful response, not glib statements

Some modest headway in recognising the unrelenting tide of discrimination and violence facing women worldwide was made at last week's largely self-congratulatory and mostly irrelevant G7 talk-fest. But no one mentioned abortion, just days after the Roe vs Wade decision.

Opinion

How industry watered-down new EU supply chain rules

The Commission fell hook, line, and sinker for the arguments of big business on the corporate due diligence directive — conflating rules and regulations with so-called 'red tape' and rebranding regulations as 'burdens' on business which should be scrapped.

News in Brief

  1. British PM defiant amid spate of resignations
  2. France says EU fiscal discipline rules 'obsolete'
  3. Russia claims untouchable status due to nuclear arsenal
  4. Catalan MEPs lose EU court case over recognition
  5. 39 arrested in migrant-smuggling dragnet
  6. France to nationalise nuclear operator amid energy crisis
  7. Instant legal challenge after ok for 'green' gas and nuclear
  8. Alleged Copenhagen shooter tried calling helpline

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  2. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  3. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  4. Council of the EUEU: new rules on corporate sustainability reporting
  5. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  6. Reuters InstituteDigital News Report 2022

Latest News

  1. Is Orban holding out an olive branch to EPP?
  2. EU should freeze all EU funds to Hungary, says study
  3. Legal action looms after MEPs back 'green' nuclear and gas
  4. EU readies for 'complete Russian gas cut-off', von der Leyen says
  5. Rising prices expose lack of coherent EU response
  6. Keeping gas as 'green' in taxonomy vote only helps Russia
  7. 'War on Women' needs forceful response, not glib statements
  8. Greece defends disputed media and migration track record

Join EUobserver

Support quality EU news

Join us