Plans to “build back better” following the impact of COVID-19 are falling short according to a new study.
A year on from the onset of the pandemic, recovery spending has fallen short of nations’ commitments to build back more sustainably, according to analysis by leading economies, led by Oxford’s Economic Recovery Project and the UN Environment Programme (UNEP).
Its report “Are We Building Back Better? Evidence from 2020 and Pathways for Inclusive Green Recovery Spending” found only 18.0% of announced recovery spending can be considered ‘green.’, prompting calls for governments to invest more sustainably and tackle inequalities as they stimulate growth in the wake of the devastation wrought by the pandemic.
“Humanity is facing a pandemic, an economic crisis and an ecological breakdown – we cannot afford to lose on any front. Governments have a unique chance to put their countries on sustainable trajectories that prioritize economic opportunity, poverty reduction and planetary health at once – the Observatory gives them the tools to navigate to more sustainable and inclusive recoveries,” explained UNEP’s Executive Director, Inger Andersen.
The report said it had undertaken the most comprehensive analysis of COVID-19-related fiscal rescue and recovery efforts by 50 leading economies so far revealing that only $368 billion of $14.6 trillion COVID-induced spending (rescue and recovery) in 2020 was green.
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.”
“Our ability to better inform and monitor the investments made by countries to address the socio-economic effects of the COVID-19 pandemic is vital to keep the green, inclusive recovery on track,” added Achim Steiner, UNDP Administrator. “In this respect, the Global Recovery Observatory and UNDP’s Data Futures Platform offer policymakers a rich new set of data points and insights – expanding access to such resources will help to increase the transparency, accountability, and effectiveness of the investments being made now and their impact on our sustainable future.”
Professor of Environmental Economics at Oxford, Cameron Hepburn warned: “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.”
The report emphasised a green recovery can bring stronger economic growth, while helping to meet global environmental targets and addressing structural inequality. To keep decades of progress against poverty from unwinding, low-income countries will require substantial concessional finance from international partners.
“On the whole, so far global green spending has been incommensurate with the scale of ongoing environmental crises,” according to the report, including climate change, nature loss, and pollution, missing significant social and long-term economic benefits.
The report’s key findings were:
- $341 billion or 18.0% of spending was green, mostly accounted for by a small group of high-income countries. Global recovery spending has so far missed the opportunity for green investment.
- $66.1 billion was invested in low carbon energy, largely thanks to Spanish and German subsidies for renewable energy projects and hydrogen and infrastructure investments.
- $86.1 billion announced for green transport through electric vehicle transfers and subsidies, investments in public transport, cycling and walking infrastructure.
- $35.2 billion was announced for green building upgrades to increase energy efficiency, mostly through retrofits, notably in France and the UK.
- $56.3 billion was announced for natural capital or Nature based Solutions (NbS)– ecosystem regeneration initiatives and reforestation. Two-fifths was directed towards public parks and counter pollution measures, notably in the US and China, improving quality of life and addressing environmental concerns.
- $28.9 billion was announced in green R&D. Green R&D includes renewable energy technologies, technologies for decarbonising sectors such as aviation, plastics, and agriculture, and carbon sequestration. Without progress in green R&D, meeting the Paris Agreement targets would require far-reaching pricing and lifestyle changes.