MENU

Social Channels

SEARCH ARCHIVE


Additional Options
Topic

Date Range

Receive a Daily or Weekly summary of the most important articles direct to your inbox, just enter your email below:

New construction site with roof solar panels. Rüdesheim, Germany. 22 June 2019. Credit: KH-Pictures / Alamy Stock Photo
New construction site with roof solar panels. Rüdesheim, Germany. Credit: KH-Pictures / Alamy Stock Photo
INTERNATIONAL POLICY
16 June 2020 16:30

Coronavirus: Tracking how the world’s ‘green recovery’ plans aim to cut emissions

Carbon Brief Staff

Multiple Authors

06.16.20
International policyCoronavirus: Tracking how the world’s ‘green recovery’ plans aim to cut emissions

The coronavirus pandemic has had devastating consequences for lives and livelihoods around the world, while also dramatically cutting CO2 emissions.

In many countries, governments are now looking towards recovery as the pandemic’s first wave slowly recedes, with plans for economic stimulus worth trillions of dollars.

Yet as economies pick up pace, emissions are beginning to rebound. And huge stimulus plans will have consequences for CO2 emissions, even if they do not explicitly target climate change.

As a result, voices from the International Energy Agency (IEA) through to the UK’s prime minister and leading economists are among those that have called for a “green recovery” that “builds back better”, by cutting CO2 emissions as well as boosting the economy. But what is actually being proposed?

In the interactive grid, below, Carbon Brief is tracking the measures proposed, agreed and implemented by major economies around the world. The tracker will be updated over time and will include stimulus measures that have a direct bearing on climate change or energy.

(Update 1 July 2020: Entries for China, India and Denmark were added.)

Hover the cursor over text to see the full entry. Sort the grid using the arrows in the header of each column. Use the search box to filter by topic: for example, typing “efficiency” to see all entries mentioning that word.

The grid above includes government stimulus packages which – directly or indirectly – support measures aimed at reducing carbon emissions (and are often referred to as “green”).

The grid does not include measures that support fossil fuels and other high-polluting sectors, unless the money is specifically intended to help them become cleaner. It also leaves out governments’ initial “rescue” packages designed to save jobs and keep businesses afloat (see below).

The short sections below, on individual economies, contain further information about bailouts as well as additional context and background information.

This tracker grid will be updated with new announcements as they are made. Older entries will be updated as more details emerge.

We welcome any tips or clarifications about green stimulus packages, so please contact us on [email protected].

Shaping recovery 

The coronavirus pandemic arrived in what had been billed as a banner year for climate action. At the start of this crucial decade, 2020 was due to see a round of ambition-raising under the Paris Agreement followed by a review of progress at the annual COP26 UN climate talks.

Now, those talks have been postponed for a year and in place of the expected shuttle diplomacy around ambition-raising and national climate targets, attention is focused on saving lives and rescuing stuttering economies, in the midst of the world’s worst recession since the 1930s.

Nevertheless, the pandemic is expected to cause the largest reduction in annual CO2 emissions ever recorded, with factories shuttered and mobility greatly reduced.

Even as emissions rebound as countries take tentative steps towards normality, the longer-term shape of the recovery remains in the hands of policymakers, who will decide which industries deserve taxpayer support.

Rather than the reduction in emissions this year – which will have a negligible impact on atmospheric CO2 levels and warming – it is this longer-term trajectory that matters most.

After the global financial crisis in 2008, CO2 emissions quickly resurged back to their previous levels and beyond, on a wave of carbon-intensive stimulus spending.

A repeat of this playbook in the aftermath of coronavirus could make the world’s most ambitious 1.5C warming limit – which was already “slipping out of reach” – all but unattainable.

Stimulus measures

Globally, government stimuluses had already reached “$15tn and counting” by early May, according to Reuters. In early June, Bloomberg put the total at $12tn, of which it said less than 0.2% had been targeted towards climate priorities.

Meanwhile, the IEA and International Monetary Fund say $9tn has been pledged. These divergent figures point to the challenge of adding up these disparate measures.

They range from monetary policy, such as central banks lowering base rates or purchasing loans via “quantitative easing” (QE), through to fiscal policy via government spending to pay peoples’ wages, investment in specific programmes or giving loans to distressed companies.

(Although QE is often designed to be neutral in terms of which sectors of the economy it supports, providing a generalised monetary stimulus, research suggests that historical bond purchases by the European Central Bank (ECB) and Bank of England have been “skew[ed] towards high-carbon sectors”. According to Greenpeace, recent ECB bond purchases have included fossil fuel firms.)

Governments are also reaching for a range of tax and regulatory levers in their efforts to stimulate the economy, whether lifting restrictions on renewable capacity, rebalancing car tax incentives, giving tax relief to oil firms or moving to ease other environmental rules in the name of stimulus.

So far, “potentially damaging contributions” dominate the stimulus packages of 17 major economies, according to the consultancy Vivid Economics. Its Green Stimulus Index rates packages as “nature friendly” (green) or unfriendly (brown), shown in the chart below.

Green stimulus index developed by Vivid Economics using a range of sources and covering 17 key economies. The index weights packages by their monetary size and expert judgements of the “green” versus “brown” nature of the national policy context, the recipient sectors and the individual measures.
Green stimulus index developed by Vivid Economics using a range of sources and covering 17 key economies. The index weights packages by their monetary size and expert judgements of the “green” versus “brown” nature of the national policy context, the recipient sectors and the individual measures. Source: Vivid Economics 3 June 2020 update. Chart by Carbon Brief using Highcharts.

One reason that so little of the money allocated so far has, according to Bloomberg, gone towards climate causes, is that the government response to the crisis has come in different phases.

In the initial “rescue” phase, spending was being used primarily to keep people employed and businesses afloat. Now, governments are looking for stimulus measures to initiate economic “recovery”.

It is this second “recovery” phase that can be rated as “green” or “not green”, says Prof Cameron Hepburn, director of the Smith School of Enterprise and the Environment at Oxford University. (He led a recent study rating stimulus measures by their potential climate and economic benefits.)

Calls for a “green recovery” have been supported by a chorus of voices, from the Pope to the head of the UN and the presidents of Germany, Austria and Switzerland, among many others.

In the UK, nearly 200 major firms called for a green economic recovery, as well as corporate bailouts made conditional on the country’s net-zero emissions goal. Perhaps surprisingly, many of their demands are closely aligned with those from campaign group Greenpeace.

Unconditional bailouts

Despite the voices calling for conditional loans and green recoveries, stimulus spending so far appears to have been relatively indiscriminate in terms of climate change.

In the UK, industries such as aviation, automotive and oil and gas services have been among the largest recipients of Bank of England loans, according to Greenpeace’s Unearthed.

Globally, airline bailouts have totalled nearly €33bn ($37bn) with no or only rather limited climate conditions, according to a tracker maintained by the NGO Transport and Environment.

The aviation industry has been one of the hardest hit during the pandemic, due to restrictions on internal movement and extra border controls. After decades of extremely rapid growth, many airlines are now saying that demand will take years to recover.

One consequence is that the UN climate scheme for the sector, known as Corsia, has been weakened to account for slower demand growth.

Broadly speaking, sectors reliant on fossil fuels – such as coal power, combustion engine cars or oil and gas extraction – have been more severely affected by the coronavirus pandemic than clean energy technologies, such as renewables or electric vehicles.

Key economies

European Union 

The European Commission has announced its plan for a €750bn ($848bn) “Next Generation EU” recovery fund, which is split into €500bn ($565bn) of grants for member states and €250bn ($283bn) of loans. This remains a proposal and has yet to be agreed by the European Council or parliament.

President Ursula von der Leyen said in a statement that the plan would focus not only on supporting coronavirus recovery, but also “investing in our future” via the European Green Deal, which the commission says should become a “job-creating engine”.

The proposal states all spending would be guided by a “sustainable finance taxonomy” and “the green oath to ‘do no harm’”. While, in principle, this should exclude investments in high-polluting infrastructure, environmental groups say the proposal could still include fossil-fuel spending.

In its announcement on the recovery plan, the commission said 25% of the EU budget would be reserved for climate action, sticking with the principle agreed to in its original budget. However, it is still unclear whether this would apply to all of the €750bn in the proposed recovery package.

The initial proposal does not include extensive details, but a leaked “working document” reported by some news outlets hints at a more complete picture, including a “renovation wave” of funding for rooftop solar panels, home insulation and renewable heating.

South Korea

In the run up to the recent election in South Korea, the incumbent Democratic Party proposed a “green new deal” with a range of measures to promote a cleaner economy, including renewable investment and an end to coal financing.

After winning the election, the government put forward a repackaged plan dubbed the “Korean new deal” to reinvigorate the economy amid the coronavirus pandemic. 

Receive our free Daily Briefing for a digest of the past 24 hours of climate and energy media coverage, or our Weekly Briefing for a round-up of our content from the past seven days. Just enter your email below:

The deal includes two key components – “green” and “digital”. In total, the green spending being proposed amounts to 12.9tn won ($10.6bn) by 2022 and is intended to create 133,000 jobs.

However, the government has come under criticism from environmental groups for issuing a 1tn won ($800m) emergency loan to leading coal plant manufacturer Doosan Heavy Industries & Construction Co, which they say was already struggling prior to the pandemic.

There has also been money set aside in South Korea’s general economic relief package to help polluting industries such as aviation and shipbuilding during the crisis.

Germany

In early June, the coalition government of Germany agreed to a stimulus package worth €130bn ($146bn). The measures agreed by the cabinet must still be signed off by the German parliament.

The package is divided into three pillars, one of which is called “invest in a future-friendly Germany” and is allocated €50bn ($56bn), or some 38% of the total. This pillar has a strong – but not exclusive – focus on the “energy transition” and “sustainable mobility”.

One notable feature is a major €9bn package of support for the development of hydrogen, particularly renewable hydrogen. The German research ministry says “green hydrogen” made from renewable energy is “tomorrow’s oil” and will be “indispensable for the energy transition”.

Despite lobbying by some states and industry, the package only includes extra subsidies for hybrid and electric vehicles. (This extends an existing scheme, under which most support so far has gone to hybrids, which cut CO2 emissions far less than EVs). Since petrol and diesel cars are excluded, some have called combustion engines the “big loser” of the agreement.

Bloomberg called the package “the world’s greenest stimulus plan” and said 30% of spending would go to “activities that will cut emissions”. According to Clean Energy Wire, many groups welcomed the plan’s climate focus but said it was not “fully align[ed]” with emissions targets.

Further details of the package are set out in a 15-page PDF document (in German). For the grid, above, these details are supplemented with news reporting around individual measures in the plan.

China

As the suspected source of the pandemic, activity slowed down earlier in China than elsewhere and the nation’s economy reportedly shrank in the first quarter for the first time since the Cultural Revolution in 1976.

The government has since pledged an extra 3.6tn yuan ($500bn) in stimulus to help the coronavirus recovery, with talk of a particular focus on supporting “new infrastructure”, such as 5G and ultra-high voltage electricity transmission.

Among the construction projects being discussed is the wider rollout of charging stations for electric vehicles, but much of the stimulus funding may still be funnelled into carbon-intensive infrastructure spending.

The leadership’s decision not to set an annual economic-growth target for the first time in decades has been met with cautious optimism by environmental groups.

Meanwhile, decisions to drop the national energy-intensity target for 2020 and adjust environmental standards applied to firms have played into wider speculation that China might rely on high-emitting sectors to recover from coronavirus.

Concerns about an overreliance on coal in China’s economic recovery have been stoked by local governments approving large numbers of new coal plants in the first half of the year, although the nation has also indicated it will end the use of green bonds for “clean coal” projects.

Carbon Brief analysis shows that with China’s coal power, cement and other heavy industries “bouncing back” faster than other sectors of its economy, its emissions surged back in May beyond pre-coronavirus levels, following an initial decline.

India

Despite plans for a 20tn rupee ($266bn) stimulus package, there has been little evidence of specifically “green” intentions from the Indian government in its post-coronavirus strategy.

In fact, many of the measures announced so far actively support the nation’s highest polluting industries.

Among these measures are providing $6.6bn for coal infrastructure, promoting coal gasification with tax incentives and fast-tracking the approval process to clear areas of forest for industrial uses. The government’s decision to open up 41 coal mining blocks to private investors with the goal of creating jobs has drawn criticism.

So far, the only portion of money set aside for projects with a potential climate benefit has been a boost for an afforestation programme designed to benefit rural populations.

Another relevant post-coronavirus initiative that could help cut emissions is the government’s decision to hike excise duty on petrol and diesel as oil prices decline internationally.

While the move may ultimately help cut emissions by reducing fuel consumption, it was motivated by the government’s desire to increase revenue as it faces its highest ever tax collection shortfall due to the pandemic.

Denmark

The Danish government has released its plan to meet ambitious climate targets, adopted last year, and become a “green pioneer” despite the coronavirus crisis.

Denmark has committed to cutting its emissions by 70% from 1990 levels and becoming an exporter of clean energy by 2030. In May, the government laid out its strategy for reaching this target to parliament.

Ministers have stated that the pandemic has reinforced the government’s determination to increase green investments and that their plan would create thousands of new jobs.

The strategy has six components, including the construction of 4 gigawatts (GW) of offshore wind power, investing in “green technologies of the future”, such as carbon capture and storage (CCS), and improving the energy efficiency of Danish homes.

Finance minister Nicolai Wammen said in a statement accompanying the announcement: “The corona crisis is serious, but it has only made the need to think about the development of Denmark greater”.

Denmark has also joined several other EU nations in calling for the European green deal to be placed at the heart of any coronavirus recovery efforts.

Interactive tracker designed by Tom Prater for Carbon Brief.

Sharelines from this story
  • Coronavirus: Tracking how the world’s ‘green recovery’ plans aim to cut emissions
  • Coronavirus: Which countries are implementing 'green stimulus' packages to cut emissions?

THE BRIEF

Expert analysis directly to your inbox.

Get a Daily or Weekly round-up of all the important articles and papers selected by Carbon Brief by email.

THE BRIEF

Expert analysis directly to your inbox.

Get a Daily or Weekly round-up of all the important articles and papers selected by Carbon Brief by email.