Massive programmes of green public investment would be the most cost-effective way both to revive virus-hit economies and strike a decisive blow against climate change, top U.S. and British economists said in a study published on Tuesday.
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. 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 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.”