Covid-19 stimulus packages provide little money for environment

NEW YORK (BLOOMBERG) – Only a fraction of the money from Covid-19 stimulus packages announced by the world’s 30 largest economies is being directed to industries that have a net positive impact on the environment and climate, an industry report said.

About US$1.8 trillion (S$2.38 trillion), or 12 per cent, of US$14.9 trillion is being channelled to parts of the transportation and agricultural sectors that are cutting greenhouse-gas emissions or benefiting nature and biodiversity, according to think tanks Vivid Economics and Finance for Biodiversity.

By contrast, almost 33 per cent of the global total is going to carbon-intensive sectors such as fossil fuels and heavy industry.

The analysis is based on scores in the think tanks’ Greenness of Stimulus Index (GSI), which was started last April.

Denmark ranked highest, followed by the European Union and Canada. Russia was at the bottom, after Turkey and Saudi Arabia, the report showed.

Seventeen nations improved their GSI scores, while four fell in the ranking. The US, which ranked 15th of the 30 countries, gained as President Joe Biden signalled support for clean technologies and other industries that are likely to spur green employment.

If Mr Biden’s US$1.9 trillion stimulus package, which is currently making its way through Congress, is signed into law, the US’s score may rise further, the think tanks said.

Canada was among the nations whose scores climbed the most in the GSI after its stimulus plan announced in December included infrastructure investments in energy and transport, the think tanks said.

China has a negative score, partly because its stimulus package includes support for the industrial sector. Still, the nation’s GSI score improved overall, as a result of its announced ambitions to reduce its role in global warming and increase its solar and wind capacity, according to the report.

India’s recent stimulus announcement includes incentives for battery production and solar, the think tanks said. Like China, India’s GSI score improved, but its index ranking remained negative, in part because of its support for coal.

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