It’s 2030. You live in a 15-minute city and bike to work on a network of bike paths; most of the vehicles that are still on the road, from delivery trucks to school buses, are electric, running on wind and solar power from a revamped power grid. Formerly redlined neighborhoods have been planted with trees, equipped with electric carsharing, and covered in solar panels. When you want to take a quick trip to another city, you ride on an electric high-speed train.
Or none of those changes happen, and carbon emissions continue on a path toward an unlivable future.
The world is at a turning point in terms of climate math: By roughly 2030, as outlined in a landmark UN climate report, carbon emissions need to drop by about half for the world to avoid the worst impacts of climate change. By 2050, net emissions need to drop to zero. Whether that massive systems change happens, climate policy experts say, will depend on the choices we make now—including how governments choose to spend money on the recovery from the COVID-19 pandemic.
“As they design economic recovery plans, policymakers are having to make enormously consequential decisions in a very short space of time,” the International Energy Agency wrote in a recent report arguing for a green recovery. “These decisions will shape economic and energy infrastructure for decades to come and will almost certainly determine whether the world has a chance of meeting its long-term energy and climate goals.”
This story is part of Fast Company‘s Building Back Greener package. As the COVID-19 pandemic and climate catastrophes continue, we’re looking at what should come next, and how we can reshape our climate future through the coronavirus recovery decisions we make now. Click here to read the whole series.
Governments across the world have already pumped more than $11 trillion in stimulus funding into their economies to respond to the pandemic, with more to come. That’s more than triple the amount that went into the stimulus after the 2008 financial crisis. It also far surpasses the roughly $600 billion spent globally each year—from households and businesses installing renewable energy, to private banks, to national infrastructure—on investments related to climate change.
“This is an incredible opportunity that we have, as a lot of countries try to get their economies back on track, to really direct a lot of funding to clean energy and technologies that will enable us to deeply decarbonize the economy,” says Robbie Orvis, director of energy policy design at the nonprofit Energy Innovation. “The green technologies that are going to help us decarbonize the economy are also huge job creators and tend to be higher job creators, per dollar spent, than fossil industries. So directing money to those technologies can really unlock a lot of jobs.”
Around the world, governments have started planning some elements of a green recovery. In July, when the EU approved a massive stimulus plan, 500 billion euros ($572 billion) were earmarked to fight climate change, from energy efficiency to restoring nature. A “do no harm” principle applies to the rest of the funding.
Multiple country- and city-wide green recovery measures are underway. Germany, for example, will spend nearly $18 billion on EV charging infrastructure, subsidies for electric cars and buses, and other sustainable transportation measures, including helping the national railway expand and electrify (without any corresponding subsidies for the gas and diesel vehicles made in the country). In cities such as Paris, the government has been accelerating the rollout of new bike lanes, recognizing that it’s a safer way to get around during the pandemic—but also part of long-term changes that are needed to tackle climate change.
Colombia is spending $4 billion on multiple new renewable energy plants. China is spending $1.4 billion on EV chargers. Nigeria plans to put more than $600 million into solar panels for millions of homes. Other countries, including Italy and South Korea, are increasing subsidies for solar panels. France is putting more than $8 billion into retrofits to make buildings more efficient; Denmark has proposed spending nearly $5 billion to retrofit social housing. In the U.K., which plans to spend $3.9 billion on retrofits, the government says its program will create 140,000 jobs. India will spend $780 million on planting trees and managing forests. In some countries that have given emergency loans to struggling, polluting industries, that money has come with conditions; Air France, for example, has to cut its emissions in half on domestic flights by 2024 in order to get a 7 billion euro loan from the French government.
Then there’s the U.S., where none of the recovery funding to date has gone to fight climate change, and the Trump administration has used the pandemic as an excuse to continue rolling back environmental regulations. But despite some of the bright spots, in many other countries, too, most funding is not directed at the climate. An analysis tracking how G-20 countries are investing in the recovery shows that more than half of the funding for energy so far—$212 billion—has gone to fossil fuels.
Joe Biden has proposed a $2 trillion climate plan that would invest in climate research and innovation, accelerate the move to renewable electricity, make buildings more efficient, and give rebates to replace appliances and swap polluting cars for lower-emissions vehicles. He also wants to create an office of environmental and climate justice to take on the challenges of environmental justice in communities of color. The plan, he estimates, would create 10 million clean energy jobs. Another recent report, Rewiring America, estimates that electrifying the U.S. would create 25 million jobs as it cuts emissions.
Not focusing on a green recovery would be a missed opportunity, says Alex Dewar, senior director of the Center for Energy Impact at Boston Consulting Group, which recently published a report analyzing how countries can benefit from a green recovery. If countries invest in long-lasting fossil infrastructure now, “it really risks locking in a much higher carbon intensity pathway that it’s harder to get off in the future,” he says. Conversely, multiple benefits can flow from green investments now. In countries that import fossil fuels now, such as Japan or South Korea, shifting to renewables and electrification can improve the balance of trade. In other countries, scaling up renewable energy or electric vehicle manufacturing can secure a share of new markets. And the changes can create much-needed jobs everywhere. In the U.S., for example, energy efficiency measures alone could create millions of jobs retrofitting homes. The shift away from fossil fuels will also save consumers money and benefit the economy by saving healthcare costs from the effects of pollution.
“There’s also a lot at stake for companies here as well,” Dewar says. “There are tremendous opportunities here for accelerating the rate of economic growth coming out of COVID-19 from more green-oriented stimulus programs, in terms of the economic as well as employment multipliers that have been demonstrated for green investments. This is really a win-win opportunity for better, more sustainable economic growth, more equitable economic growth, and, of course, action on climate.”