How likely is a Green Revolution after COVID-19?
As the spread of coronavirus recedes in most of the world, could there be a greener path ahead?
“Nature is healing.”
This observation was so widespread it quickly became a meme. Lockdown measures unintentionally reduced pollution levels by all but eliminating the use of major pollutants such as cars, planes and factories, and people began sharing images and videos of all kinds of animals colonizing streets and canals devoid of people.
Most of these animal images and videos were fake, in one way or another. But many weren’t. The general quiescence that has settled over so many of the world’s public spaces will form an indelible memory for those alive to have seen it. Naturally, preserving the current state of affairs is not desirable for anyone (except perhaps those that have profited spectacularly from the situation) – but we might be forgiven if, during reintegration, we preserve the best aspects of lockdown, including the reduced commercial energy usage, lower levels of urban pollution and perhaps some sort of scaling back of industrial activity. The 8% drop in carbon dioxide levels predicted for 2020 would, if repeated every year in the 2020s, put the world on track for its “1.5C” target. Paris has already promised 650km of “corona cycle-ways”, and Milan and other cities are following suit. Will some sort of green revolution ensue from these difficult days?
How green is my valley
The short and honest answer is: probably not. A revolution in the meaningful sense of the word would look something like what is advocated by figures such as Greta Thunberg and George Monbiot, which would entail a radical rethinking of capitalism – unlikely given that this would require both major government intervention and a systemic corporate shift away from shareholder profit prioritization. What is more likely is a return to business as usual but with a little more working from home and a little less voyaging to conferences.
Even lockdown itself hasn’t exactly been a green bonanza: not only has the physical development and testing of new renewable technology become almost impossible, but devastation is being wrought around the world as you read this. The coronavirus measures have been a boon for illegal loggers, miners and wildlife traffickers in South America, Africa and southeast Asia, operating at an unimaginable scale. In March, Brazil’s environmental enforcement agencies IBAMA and ICMBio scaled back their forest monitoring services for coronavirus-related reasons. In April, deforestation in the Amazon increased by 64% more than the increase in April 2019. In the first four months of this year, deforestation increased by 55% more than the same period in 2019. 1,202 square kilometers were razed in the Amazon alone – the equivalent of Japan’s Okinawa Island. As well as the direct effect of contributing to global warming by reducing carbon capture, the mass deforestation will also likely lead to a significant increase in forest fires.
“What worries me is that we’re seeing these emerging trends, and they’re not going to be reversed when COVID measures are lifted because they’re related to economic factors,” says Sebastian Troeng, executive vice-president of Conservation International, commenting on the urban-rural migration and economic desperation that have arisen out of the current situation. “So my anticipation is that we’re going to have to deal with this for potentially months and years.”
A way ahead
The consensus among economists that government spending on green policies will offer stronger economic results in the medium and long term, and that the coronavirus has provided a convenient juncture for such strategic spending, is stronger than ever; yet most economists are not policymakers. The US government, for instance, ignored calls to avoid unconditionally bailing out major airlines, in the face of those airlines’ history of opportunistic share buybacks as well as the fact that airlines are major polluters. (I say “unconditionally”: Trump has done his best to ensure the original conditions stipulated in the stimulus bill have no independent overseer.)
A new study published in the Oxford Review of Economic Policy has corralled the opinions of 230 leading economists, including academics, G20 finance ministry officials and central bank wonks, on potential post-coronavirus policies, ranked by their economic multiplier effect (i.e. the self-perpetuatingly positive impacts they’ll have on the economy), the speed of their effectiveness, and their environmental friendliness.
Five policies stood out in particular: clean physical infrastructure investment (including renewable energy assets, carbon capture technology, clean energy storage and grid modernization); efficient renovations (including improved insulation); retraining and education; investment in natural capital (often known as rewilding); and investment in clean R&D. Among European respondents, there was a particularly strong link drawn between green policies and an economic multiplier effect. Among all respondents, across 53 countries, unconditional airline bailouts were seen as having a very low economic multiplier effect as well as not being green.
The green policies are eminently realizable, and need not come at the expense of jobs. Last year, in the UK alone, green economy turnover was over £50 billion, employing around 250,000 full-timers. The green economy is growing at 10% per year; further government investment, especially at a juncture of crisis-precipitated stasis, could make that green economy not just expand, but a structurally integral part of the world’s major economies.
According to the writers of the Oxford Review report, of the post-COVID fiscal stimuli introduced by governments as of 19 June, 4% are “green” (with the ability to reduce long-term greenhouse gas emissions), 4% are “brown” (likely to increase those emissions beyond the base case), and 92% simply maintain the status quo. This isn’t especially surprising: the stimuli were bipartisan emergency efforts to preserve as much stability and as many livelihoods as possible. But in the absence of comprehensive pro-climate policies embedded into wider economic policy, we are on track for another 3°C of global warming by 2100, according to conservative estimates.
The “brown” policies include the airline bailouts – a $32 billion package for US airlines and a $423m package for Australian ones, neither one conditional on the companies implementing any green commitments. Meanwhile, in the US, all the fossil fuel behemoths are in line to benefit from the Federal Reserve’s $750 billion bond buyback programme, with no environmental strings attached. This is despite clean energy infrastructure generating twice as many jobs per government dollar invested as fossil fuel infrastructure.
Of the world’s 25 largest fossil fuel companies, 19 are at least partially state-owned, allowing them government subsidies and tax breaks that allow them to produce fuel cheaply, further disincentivizing systemic switches to renewable energy. Naturally, many fossil fuel giants claim that this economic favoritism is crucial to propping up their renewables budget – yet according to a January report by the International Energy Agency (IEA), an organization set up under an OECD framework, the world’s major oil and gas companies spent between 0.5-0.8% of their total capital expenditure on projects outside of core oil and gas supply between 2015 and 2019.
Global warming is a problem that can only be solved with serious international cooperation, and the US’s current suspicion of multilateralism – underlined most starkly by its recent pledge to cut ties with the World Health Organization (WHO) – is another factor inhibiting a green recovery in the near future. On 4 November 2020, the day after the US presidential election, the period during which the US can reverse its withdrawal from the Paris Climate Accord will elapse, and there is almost zero chance the US will reverse its decision and honor its original commitments as a world leader in environmental friendliness.
In 1965, the US spent over 2% of its annual GDP trying to put – and eventually succeeding in putting – man on the moon. Exactly 50 years later, in 2015, the US was spending less than 0.2% of its annual GDP on investment in renewable energy. As a percentage, that’s four times less than the UK, Japan or France were spending, and seven times less than what South Africa and Chile were investing. Without concerted efforts by national governments in addition to serious-minded international cooperation, the greener planet we need will be but a pipe dream.
Will Europe lead the way?
Earlier this month, an open letter was sent to EU decision-makers by institutional investors worth $12 trillion in total, demanding a green recovery from the pandemic. “We can’t ignore the dual challenge of the climate and economic crisis,” said Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change (IIGCC), an organization in concert with which the letter was written. “Financial decisions made over the following 12 months will shape the global economy for the next decade and beyond, and determine whether we have built the foundations for a sustainable future. A green recovery is the only option when the alternative means further carbon lock-in and fuelling the climate crisis for decades to come.”
The letter called on EU leaders to “prioritize human relief and job creation without locking in high-carbon pathways”; “uphold the Paris Agreement”; and “prioritize climate resiliency and net zero emissions economic solutions”. Given the heft of the investors backing it, the missive may have had some impact on the European Commission confirming that of the proposed €750 billion fund dedicated to the EU’s coronavirus recovery, 25% will be set aside for combating climate change. And unlike in the US, tight scrutiny will be applied, with any request to tap into the fund having to be signed off by the Commission and the EU Council.
Even the UK government is at least planning a green recovery. Some Conservative MPs have proposed “green enterprise zones” for the areas hit hardest financially by the pandemic, while Chancellor Rishi Sunak is planning a “green industrial revolution”, targeting workers that have lost their jobs as a result of the pandemic. His most recent budget allocated £640 million to tree planting and peatland restoration in England, as well as £304m for local authorities to reduce nitrogen dioxide emissions. Business Secretary Alok Sharma is also creating five business-focused, minister-led groups for dealing with post-COVID business, one of which will be devoted entirely to the green recovery. Next month’s UK stimulus is expected to contain more specifics about a potential green recovery.
The mantle of responsibility is also being shouldered by many large corporations, which are in turn often driven by more eco-conscious consumers. Microsoft has pledged to go carbon-negative by 2030, and by 2050 to have removed all the carbon pollution – including the pollution of its suppliers – it has emitted since 1975. Sky is already carbon-neutral (in 2006 it became the world’s first carbon-neutral media company), and pledges that its supply chain will be carbon-negative by 2030. Even BP – which stands for British Petroleum, lest we forget – has declared that it will be carbon-neutral by 2050.
For the energy companies, this patina of corporate environmental responsibility has functioned, and often continues to function, as a smokescreen (no pun intended). BP itself has long been a classic example. For decades it has invested in environmental awareness marketing campaigns, positioning itself as the vanguard of renewable energy innovation and investment. In 2005 it spent $100 million per year on an ad campaign that popularized the idea of the “personal carbon footprint”, even creating an online calculator so you could see how much you personally were contributing to climate change, shifting the balance of responsibility onto individuals.
But the IEA’s January report revealed that only 3% of BP’s investments are directed towards clean energy – and BP is one of the better ones. In 2017 and 2018, BP began work on 13 major oil and gas projects, contributing towards – in its own words – “900,000 barrels of oil equivalent per day of new production by 2021”. Its latest ad campaign, derided by environmentalists as “greenwashing”, has earned a lawsuit brought against it by legal charity ClientEarth on the grounds that it misleads consumers.
Meat in the middle
Converting oil and gas into renewable energy cannot alone save us from a climate catastrophe. It is increasingly well known that industrial agriculture is a huge contributor to global warming. As well as playing a huge role in producing carbon dioxide and methane, livestock is responsible for 65% of all human-related emissions of nitrous oxide, a gas that remains in the atmosphere for 150 years and has around 300 times the global warming potential of carbon dioxide.
Already in five years, the dialogue around meat and dairy in the economically developed world has changed significantly. Europe, and the UK in particular, has adapted rapidly to shifts in consumer demand: in much of England you would be hard-pressed to find a high street that isn’t home to several affordable (and popular) vegan options. The US is some way behind: it may have plenty of vegan restaurants, but offers very little in the way of cheap, easy-to-find on-the-go vegan eats. But meat substitute company Beyond Meat’s stock price has performed famously well since its successful IPO last year, and restaurants and cafés around America have slowly been adapting to changing customer taste.
Governments could play an important role here. But that role is as yet ill-defined. It would require careful economic and cultural considerations, and ideally international coordination, if industrial agriculture is to be made more sustainable on a mass scale.
The role of governments
A lot can change between now and 2050; a whole generation will pass, and today’s adolescents will be occupying positions of serious power by then. On the whole, they will be more environmentally minded than their predecessors. By then, many major corporations will have gone carbon-neutral, and sustainability will no longer be widely seen as a trade-off with economic growth but as an essential part of it. The question is whether it will be too late by 2050 to avert a 2°C or even 3°C increase in global temperature by the end of the century.
The current wave of far-right populism, bolstered by fake news and social media tolerance of it, shows no sign of slowing; when the more left-leaning alternatives eventually start winning elections again, their manifestos will have been dragged further to the right and away from the more radical structural changes needed to effect a rapid tackling of climate change. Free-market capitalism has been responsible for many innovations and improvements to the everyday life of billions of people – but it is inherently incapable of tackling climate change alone. The greatest innovations, from the internet to renewable energy technology, have been heavily reliant on direct or indirect government investment.
Yet governments need to take care to not build their plans on false assumptions when forming policy. After the global financial crash (GFC), South Korea declared its intention to commence a path of “low-carbon green growth”, aiming to spend 5% of its GDP on its own “Green New Deal”. Yet in the end, its commitments have not lived up to its promise, and it has not yet phased out fossil fuel subsidies or implemented the regulatory frameworks and enforcement necessary to push the country down the path to de-carbonization. In fact, the country’s carbon dioxide emissions have been increasing since the GFC.
What biological scientist Meehan Crist has called the “suicidal logic of the profit motive” will, if not checked by governments, not decelerate climate change rapidly enough to avoid millions of deaths and an irreversible change to our cultural landscapes. This issue, more than any other, is the greatest issue of our time; to measure up to it, all major governments – and not just the EU – will have to take a more active and concerted role than they have done so far in response to the coronavirus. The prospects may seem grey, but it isn’t too late – yet.
The European Commission’s approval of the copyright directive in April threw more gas on the fire. In a few years, the internet has become – among other things – the main market fo
The long-serving boss of Cobepa, Jean-Marie Laurent Josi talks about the business model of a Belgian investment firm that is trusted by major European families, one which marries t
Since the last half of 2008, it is no longer possible to conceal the term ‘crisis’. New paradigms have become apparent and structural changes are predicted. Indeed mar