Nations are in the process of designing and implementing packages to aid economic recovery from the pandemic. A new paper from the Smith School collected opinions from 231 economic experts to compare the performance of 25 major fiscal recovery types across four criteria: speed of implementation, economic multiplier, climate impact potential and overall desirability.
By combining the survey results with a review of measures implemented following the 2008 financial crisis, the authors identified five policy types which stood out as having high potential both economically and for combating climate change. These were:
1. Clean physical infrastructure spending: renewable energy assets, energy storage, grid modernisation and carbon capture & storage
2. Building efficiency investment: renovations and retrofits including improved insulation, heating, and domestic energy storage systems
3. Investment in education and training: address immediate unemployment from COVID-19 and structural shifts involved in decarbonisation
4. Natural capital spending: regeneration of ecosystems, especially carbon-rich habitats, ecosystem management to increase resilience to change, and investment in low-emission, nature-based agriculture
5. R&D in high income countries. Rural support scheme spending in low and middle income countries: sustainable agriculture, ecosystem regeneration, and clean energy installations
Which economic recovery methods are most suitable will, of course, vary greatly between and within countries. The survey elucidated that the European respondents rated climate-positive policies particularly highly: the policies in the top three for economic multiplication were environmental policies.
Natural capital spending has a number of clear strengths as a method for economic stimulus:
– Workers often require less training than in many other fields, reducing overhead costs and increasing the speed of implementation
– Less planning and procurement is needed than in alternative projects
– Most jobs for implementing nature-based solutions meet social distancing requirements, since they are either office-based or outdoors with less person-person interaction than industries like construction
– There are many pre-existing schemes that can be launched or up-scaled, such as the Trillion Trees Initiative, the Bonn Challenge, REDD+ and Nationally Determined Contributions to the Paris Agreement
Whilst all these features make nature-based solutions attractive for job- and wealth-creation schemes, it also makes them vulnerable to misuse. There is a risk that tree planting, for example, may be used to rapidly create a large number of jobs, without ensuring that a suitable combination of tree species are planted in appropriate locations, so as to create biodiverse ecosystems that are resilient to change and accumulate carbon for decades to come (for further discussion and an example, see here). This does not draw away from the fact, however, that ecosystem restoration and other forms of nature-based solutions need to be implemented on a grand scale in order to combat the climate and biodiversity crises, and that the current pandemic raises an opportunity for directing funding and effort towards NbS programmes.
NbS and other climate-friendly methods for economic stimulus can create jobs on a large scale and provide the financial boost that governments desire. If they are well planned and informed by the best possible science, then they will also deliver long-term benefits for people and planet. As the paper’s authors say, green recovery packages can ‘decouple economic growth from 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’.