Building a green stimulus for Covid-19
The group, New Economics Foundation have put together a report on what a post Covid-19 recovery could look like if we chose a ‘Green’ approach
The last few months have been a complete shock to almost everyone in the world and what stands out for me are two things:
- We must accept that for all the planning in the world there are some things that are simply out of our control
- The most vulnerable are put at even higher risk when we face large scale challenges to our current system
I believe this is a strong case for needing change. For needing equality within our economy so that the safety net for everyone is much stronger. We need to abandon the idea that people are only valuable if they contribute in labour and look to find new ways of governance that allow everyone to feel valued and feel safe.
In a post that goes along with the report, the NEF outlined the highlights of the research.
- The immediate Covid-19 crisis and related economic shock is taking place against the backdrop of a long-term climate emergency. Carbon emissions have temporarily fallen due to a massive reduction in travel and economic activity, but a rebound in their levels has already been observed and we are at risk of a further increase as the economy accelerates. Even if emissions do remain suppressed for some time, future higher emissions are likely without structural change.
- The immediate economic crisis resulting from Covid-19 is likely to come in the form of extremely high unemployment. Based on an average of the latest independent economic forecasts, and in the absence of a further response from the government, unemployment is likely to sit between 1.5 and 3.1 million by the end of 2021 – up to 1.8 million above 2019 levels.
- A large package of investment in ‘green’ infrastructure projects, selected on the basis of their potential to create large numbers of jobs across the country rapidly, must sit at the core of government efforts to boost the recovery.
- The failure to respond to the last recession by scaling up investment to meet climate targets was a missed opportunity. If just a third of the funds used for tax cuts between 2010 and 2013 were instead deployed as part of a home insulation programme, residential emissions would have been 30% lower in 2018 than the reality. We cannot repeat this mistake again.
What stands out for me here is that there is going to be a momental need for jobs and in the current economic system there is no alternative to give as an option.
Therefore we must create jobs. With a target of carbon zero by 2050 the government could take this opportunity as a half step and invest directly in the transition.
New jobs created specifically to deal with becoming carbon neutral could give out of work people as well as those working in carbon intensive industries the opportunity to get out, without worrying about losing their income.
We are fast approaching the point where all of this talk of change needs to hit the reality of actually changing. That bit where we all take a sharp inward breath and hope that it all goes ok. That bit where hope is the difference. That bit where we will succeed or fail.
The time for theory is coming to an end and the time for action is upon us.
The NEF Conclusions
- Our primary recommendation is that the policy response to the current crisis should contain within it the largest feasible stimulus in priority zero-carbon infrastructure.
- We propose a framework for choosing projects based on the speed at which projects can begin, the intensity of job creation, the extent to which jobs are spread across the country but can be intensified where they are most needed, and the extent to which projects are resilient to further tightening of social distancing, among other factors.
- Based on the framework presented in this paper, we develop a detailed, illustrative investment package in priority green infrastructure projects between July 2020 and Dec 2021 (see table 1 below). Based on our analysis against this framework, we find that retrofitting homes – installing insulation and heat pumps – should be the dominant component of the green stimulus package.
- We estimated that our illustrative package would see £28.3 billion invested in priority projects over the next 18 months, creating more than 400,000 full-time equivalent jobs on average in 2021. However, we also find that it is unlikely that the jobs created from investment in priority green infrastructure alone will be sufficient to ensure that unemployment falls back to 2019 levels by the end of 2021. We, therefore, propose further job-creating interventions and stimulus, particularly through expansions in public services such as child and adult care, and the NHS. Forthcoming papers will set out detailed proposal in these areas.
You can read the full report by heading to the NEF website here