Will economic recovery funds really be used to Build Back Better? So far, it's not looking good.
Just 2.5% of funds allocated by large countries to date are directed to programs to address climate change and other environmental issues.
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It felt different this time. It really did.
The COVID-19 pandemic has triggered the largest contraction in the global economy since World War II, prompting off-the-charts spending by governments to salvage their hard-hit economies.
Surely a global pandemic—with its crushing economic fallout—combined with increasingly frequent, climate-induced extreme weather events like the Great Texas Snow Disaster would finally wake up even the dumbest political leaders to the need to spend wisely to prepare for future existential crises.
It seemed to be working. Over the past year, several countries, including the U.S., adopted the slogan “build back better,” and promised to use billions of dollars in economic recovery funds to speed up the transition from fossil fuels and to create stronger societies that are prepared to deal with extreme weather and other climate-related shocks, as well as address issues of environmental justice.
So, how’s that going? Not well, so far.
Despite the many commitments to leverage recovery funds to build back in a more equitable and sustainable way, a new report led by Oxford’s Economic Recovery Project and the UN Environment Programme (UNEP), found that of the $14.6 trillion committed by governments of the world’s 50 largest economies in 2020, just 2.5% - or $341 billion - was on green programs aimed at decreasing greenhouse-gas emissions, lowering pollution or restoring degraded natural systems.
Brian O’Callaghan, lead researcher at the Oxford University Economic Recovery Project and the report’s author, said:
“Despite positive steps towards a sustainable COVID-19 recovery from a few leading nations, the world has so far fallen short of matching aspirations to build back better. But opportunities to spend wisely on recovery are not yet over. Governments can use this moment to secure long-term economic, social, and environmental prosperity.”
So far, the report says, global green spending “has been incommensurate with the scale of ongoing environmental crises,” including climate change, nature loss, and pollution, and is missing significant social and long-term economic benefits.
Cameron Hepburn, Professor of Environmental Economics at Oxford, added:
“This report is a wake-up call. The data from the Global Recovery Observatory show that we are not building back better, at least not yet. We know a green recovery would be a win for the economy as well as the climate - now we need to get on with it.
If the bulk of the money is not going to green initiatives then clearly it will be used to build back the same polluting industries that were there before and we will have achieved nothing.
To be fair, the UN figures do not include the $2.4 trillion in climate spending promised by U.S. President Joe Biden, as part of his extraordinarily ambitious “Build Back Better” plan, which also includes investments in education, social safety net, healthcare, and infrastructure.
It is unlikely that Biden will be able to muster enough Republican support to pass the bill as written so it will probably be broken into separate bills. Some of them—like infrastructure—with its emphasis on investing heavily in roads, bridges, green spaces, water, electricity, and universal broadband—might attract enough Republicans to get it across the finish line. Some of the other parts might be passed by using the reconciliation process which requires only a simple majority.
The UN figures also don’t include funds of those E.U. member states that have not yet announced how they will allocate their budgets. Those undeclared funds are worth more than $2 trillion, according to the report, and since the green recovery agenda in being driven by E.U. countries, they should increase the proportion of global recovery spending that is directed towards reducing green issues.
Still, the recovery budgets so far are discouraging—more build back the same than build back better. That is a mistake that may ultimately be fatal. The pandemic, and its recovery, have provided the world with a unique opportunity to put their nations on sustainable and just courses that prioritize economic opportunity, climate care, environmental justice, and poverty reduction. We need to get this right because we may not get another chance.
Dig Deeper
Are We Building Back Better (Oxford)
World is missing chance for green recovery from COVID-19, U.N. says (Reuters)
Biden's Jobs and Infrastructure Plans
The 5 Whys of Texas (EarthWatch)
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