Australia has fewer COVID-19 deaths than many nations and our economy is performing better than expected but we trail the world in an important pandemic recovery measure. Not surprisingly, it’s environmental.
Australia ranks last among the globe’s top 50 economies for green spending. The Oxford University Economic Recovery Project (OUERP) reported that while our stimulus spending was ranked fourth, only 2 per cent of it was devoted to green recovery measures. Worldwide, that figure is at 18 per cent.
The Guardian reported the following figures: Australia spent US$2bn on green initiatives during the coronavirus recovery, compared with US$57bn in France, US$54bn in South Korea, US$47bn in Germany, US$42bn in the United Kingdom, US$41bn in China and US$24bn in Japan.
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Brian O’Callaghan, an Australian economist and engineer who leads OUERP, says Australia is in a different stage of recovery compared to most countries still battling the worst ravages of the contagion.
However, that did not explain the failure to embrace green recovery spending.
“The consequences for Australia of low green investment are mammoth on both economic and climate grounds,” he said.
“This is the time for us to be reorienting our economy to industries that will drive future growth. The notion of a gas-fired recovery is ridiculous and the world sees that. Recession enables rebirth – now is not the time for dirty initiatives.”
The report stated the “disappointing” spending announced worldwide in 2020 failed to “build back better” as urged by the International Monetary Fund.
OUERP says responding to the global COVID-19 recession requires a “new approach to economic thinking” and stimulus spending should prioritise future prosperity by “catalysing new industries and … enabling a sustainable climate for the coming century”.
Examples of green projects where Australia ranks poorly include renewable energy, transmission projects, battery storage, electric vehicles, active transport and energy efficient or green homes. Australia’s gas-fired recovery was rated a net negative impact on environment and human health.
The report noted that Australia’s construction-focused stimulus, featuring the $2 billion HomeBuilder grant scheme “came with no green construction caveats”.
Referring to Australia’s 2020 bushfire horrors, the report states nations “whose climates are projected to become increasingly volatile as the impacts of anthropogenic climate change worsen” are “particularly likely” to benefit economically from boosting natural capital investment.
British foreign secretary Dominic Raab said his nation expected Australia to deliver a plan to meet climate commitments before a major summit later this year.
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Cameron Hepburn, professor of environmental economics at Oxford, said the report was “a wake-up call”.
“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,” he said.
The US and the UK last week issued a joint statement urging all countries “to take the steps needed to keep a 1.5 degrees C temperature limit within reach, including through ambitious nationally determined contributions and long-term strategies to cut emissions and reach net zero”.
Environmental sites greenbiz.com say “the fiscal spending plans of major economies in the wake of the coronavirus crisis have fallen far short of ensuring the recovery from the crisis does not exacerbate ongoing climate and nature crises”.
Only one in every $40 committed by governments since the pandemic will deliver a “positive impact for the planet”.
The report warns that policymakers are missing the “greatest chance we have had so far” to meet 2030 Sustainable Development Goals.
United Nations Environment Programme (UNEP) executive director Inger Anderson urged policymakers to carefully consider the Global Recovery Observatory report, which collates examples of successful green recovery spending from around the world. She says carefully designed green policies can improve health outcomes and energy cost reductions and enhance food security.
“Humanity is facing a pandemic, an economic crisis and an ecological breakdown – we cannot afford to lose on any front,” she said. “Governments have a unique chance to put their countries on sustainable trajectories that prioritise economic opportunity, poverty reduction and planetary health at once …”
OUERP lead researcher Brian O’Callaghan says the world has fallen short, but opportunities to spend wisely on recovery remain.
“Governments can use this moment to secure long-term economic, social and environmental prosperity.”
The Global Recovery Observatory report identifies five core green policy areas that policymakers should focus on: green energy; low-carbon transport; natural capital; green building upgrades and green research and development.
Should Australian pandemic recovery efforts focus on green projects? What should be the spending priority post-pandemic?
Read more: Our grim environmental scorecard
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