With co-authors including Nobel laureate Joseph Stiglitz from
Columbia University and prominent British climate expert Lord Nicholas
Stern, the findings are likely to fuel calls for “green recoveries”
gathering momentum around the world.
“The COVID-19 crisis could
mark a turning point in progress on climate change,” the authors wrote,
adding that much would depend on policy choices made in the next six
months.
With major economies drawing up enormous economic
packages to cushion the shock of the coronavirus pandemic, many
investors, politicians and businesses see a unique opportunity to drive a
shift to a low-carbon future.
German Chancellor Angela Merkel
and International Monetary Fund Managing Director Kristalina Georgieva
called for green recoveries last week, and the concept has emerged as a
political fault line from the United States to India and South Korea.
While
think-tanks and investor groups have also been making the case for
tailoring recoveries to accelerate a transition away from fossil fuels,
the study aimed to assess such proposals in the light of new data.
The
authors examined more than 700 economic stimulus policies launched
during or since the 2008 financial crisis, and surveyed 231 experts from
53 countries, including senior officials from finance ministries and
central banks.
The results suggested that green projects such as
boosting renewable energy or energy efficiency create more jobs,
deliver higher short-term returns and lead to increased long-term cost
savings relative to traditional stimulus measures.
The authors
cautioned that there were some risks with extrapolating from past crises
to discern how coronavirus recovery packages might play out, given the
possible reluctance of people to travel or socialise following the
pandemic.
Nevertheless, with carbon emissions on track
for their biggest fall on record this year, governments could now
choose to either pursue net zero emissions targets or lock in a fossil
fuel system that would be “nearly impossible to escape.”
“The
COVID-19-initiated emissions reduction could be short-lived,” said
Cameron Hepburn, lead author and director of the Smith School of
Enterprise and Environment at the University of Oxford.
“But this
report shows we can choose to build back better, keeping many of the
recent improvements we’ve seen in cleaner air, returning nature and
reduced greenhouse gas emissions.”
SHIFT TO CLEANER ENERGY
So
far, governments have focused on emergency economic relief as an
estimated 81% of the world’s workforce has been hit by full or partial
lockdowns, the report said.
But as governments move from
“rescue” to “recovery” mode, the authors identified sectors that could
provide particularly strong returns in terms of both rebooting
economies, creating jobs and advancing climate goals.
Industrialised
countries should focus on backing “clean physical infrastructure,” such
as solar or wind farms, upgrading electric grids or boosting the use of
hydrogen.
The study also recommended retrofits to improve
building efficiency, education and training, projects to restore or
preserve ecosystems, and research into clean technologies.
In
lower- and middle-income countries, support for farmers to invest in
climate-friendly agriculture came out ahead in the study, due to run in
the Oxford Review of Economic Policy.
Among the worst-performing policies: bailing out airlines without attaching climate conditions.
“The
policy frameworks already exist to steer a sustainable recovery,” said
Stephanie Pfeifer, chief executive of the Institutional Investors Group
on Climate Change, which groups pension funds, insurers and asset
managers with 30 trillion euros in assets. “We can’t leave climate
action behind.”
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