Greening the Post-pandemic Recovery in the G20
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Greening the Post‑pandemic Recovery in the G20 Edward B. Barbier1 Accepted: 8 June 2020 © Springer Nature B.V. 2020
Abstract Rebuilding G20 economies after the COVID-19 pandemic requires rethinking what type of economy we need and want in the future. Simply reviving the existing ‘brown’ economy will exacerbate irreversible climate change and other environmental risks. For G20 economies, investing in a workable and affordable green transition is essential. A good place to start is learning what worked and what did not from previous efforts to green the economic recovery during the 2008–2009 Great Recession, examining the cases of the United States and South Korea. Policies for a sustained economic recovery amount to much more than just short-term fiscal stimulus. Transitioning from fossil fuels to a sustainable low-carbon economy will require long-term commitments (5–10 years) of public spending and pricing reforms. The priorities for public spending include support for private sector green innovation and infrastructure, development of smart grids, transport systems, charging station networks, and sustainable cities. Pricing carbon and pollution, and removing fossil-fuel subsidies, can accelerate the transition, raise revenues for the necessary public investments, and lower the overall cost of the green transition. Keywords Carbon pricing · Clean energy · COVID-19 · G20 economies · Green economy · Green New Deal
1 Introduction The COVID-19 pandemic has caused the worst economic contraction since the Great Depression. According to the International Monetary Fund (IMF), the global economy is expected to decline by 3% in 2020, with advanced economics experiencing double that loss (Gopinath 2020). To counteract this economic shock, governments worldwide have already
* Edward B. Barbier [email protected] 1
Department of Economics, Colorado State University, Fort Collins, CO 80523‑1771, USA
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spent $9 trillion in direct fiscal stimulus, public sector loans, equity injections, guarantees, and other fiscal measures (Battersby et al. 2020). Most of this expenditure—$8 trillion— has been by the Group of Twenty (G20) advanced and emerging market economies.1 This amounts to 4.5% of gross domestic product (GDP) on average for the G20. It is anticipated that further spending to stimulate economies will continue through 2020 and into 2021 if not longer (Battersby et al. 2020). The focus on the immediate public health and economic crises of the pandemic has largely relegated climate and environmental concerns to the background. To date, very little of the $9 trillion of fiscal spending during the COVID-19 has been directed towards low-carbon energy and other “green” policies. As noted by Helm (2020, p. 25), “In the very short term, the coronavirus has dominated almost all political and administrative bandwidth, with little time to pursue other environmental priorities.” In comparison, during the 2008–2009 Great Recession, the G20 and a handful of other economies allocated ne
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