Only seven of 25 major economies, estimated to have a net positive impact on the climate and nature, have spent their COVID-19 stimulus packages on greening, researchers said on Thursday.
An index that is updated every few weeks by think-tanks, Vivid Economics and Finance for Biodiversity, found that much more recovery money has been reserved for industries and activities that harm nature, instead of spending on measures like planting trees or restoring wetlands.
Overall, governments are funneling an estimated $13 trillion into the world’s economies, to foster jobs and growth. Nearly a third of that is going to sectors that affect carbon emissions and biodiversity – energy, industry, waste management, transport, and farming – and the researchers identified only $567 billion as green spending.
“Our analysis of Covid-19 stimulus commitments to date suggests that investments are further entrenching unsustainable economic pathways, resulting in a high risk of stranded assets, accelerated climate change, and continued depletion of natural capital,” said co-author Jeffrey Beyer of Vivid Economics.
Nature and biodiversity have been particularly neglected, the report noted.
In the stimulus packages analyzed, funding for action to improve biodiversity and preserve ecosystems amounted to only about $108 billion so far, compared with $219 billion linked to pollution or habitat destruction.
Some governments have announced new climate- and nature-friendly stimulus packages and policies, said the analysis, citing Canada, which moved from a net environmentally negative stimulus to net positive for the first time in December’s index. The country’s Fall Economic Statement committed $2.9 billion over the next 10 years to plant 2 billion trees and to enhance the carbon storage potential of wetlands, peatlands, grasslands, and agricultural areas, it noted.
Other examples of green stimulus measures include the European Union’s Covid-19 package, South Korea’s “New Deal” and Britain’s Ten Point Plan for a Green Industrial Revolution, all of which mainly support clean energy production and use. Policy packages in Germany, Switzerland, Spain, and France were also judged to be net-positive for the environment.
Emerging economies are most dependent on environmentally intensive sectors, such as mining and agriculture, and are currently lacking strong regulatory oversight. It will be the hardest and the biggest task for them to turn their stimulus green, and they have so far failed, as per the index. These include China, India, Mexico, South Africa, Brazil, and Indonesia, it added.
Governments can use corporate bailouts with conditions such as requiring airlines to shrink their carbon footprint, as well as investing in forest conservation and subsidizing green products to green their stimulus efforts, the think-tanks said. They added that if governments allocated close to 5% of total stimulus into “nature-based solutions” like peatland restoration and sustainable farming they could create 7 million more jobs globally than sticking to business as usual.
Beyer said stimulus that nurtures nature would also deliver more economic growth, store more carbon and boost resilience to extreme weather through things like improved flood control.
Governments would need to spend much less on climatic hazards if they begin to take care of it because if we do good to nature, nature will do good to us.