Which recovery policies could accelerate progress on climate change?
In this paper Hepburn and al. argue that the recovery packages for the post-COVID period can either set the global economy on a pathway towards net-zero emissions, or lock it into a fossil system from which it will be nearly impossible to escape. In order to identify which policies would promote the former, they surveyed 231 central bank officials, finance ministry officials, and other economic experts from G20 countries on the relative performance of 25 major fiscal recovery archetypes across four dimensions: speed of implementation, economic multiplier, climate impact potential, and overall desirability. Five policy items emerged as being well-placed to contribute to economic and climate goals going forward. These are:
- Clean physical infrastructure investment;
- Building efficiency retrofits;
- Investment in education and training to address immediate unemployment from COVID-19 and structural unemployment from decarbonisation;
- Natural capital investment for ecosystem resilience and regeneration; and
- Clean R&D investment.
Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?
Authors: Cameron Hepburn, Brian O’Callaghan, Nicholas Stern, Joseph Stiglitz, Dimitri Zenghelis
From: University of Oxford, London School of Economics, Columbia University, University of Cambridge
Environmental sustainability might not have popular support
[Marian] Chertow [Yale School of Management] said that issues of environmental sustainability will be far from people’s minds as the pandemic fades. “What people will be most concerned about post-COVID is not sustainability, but economic security,” she said; they will be thinking about employment and their children’s education, about workplace safety and effective leadership in both governments and corporations.
Will COVID-19 Set Us on a More Sustainable Path?
By: Yale University
Corporate bailouts should have strings attached
[B]ailouts – in particular larger bespoke ones – must ensure coherence with further core policy goals and a country’s vision of its economic, social and environmental trajectory. A conscious alignment of financial assistance with government roadmaps on infrastructure, digitalization, innovation, social cohesion and environmental protection must rank high on policy agendas in this context. Those who raise concerns about the lobbying that underpins such choices as well as the ability of governments to pick winners, make a valid point. However, as long as bailouts are on the agenda, that point misses the key question, which is not whether governments make choices, but – as highlighted recently by Frank Elderson from the Dutch central bank – whether they choose to prop-up the economy of yesterday or to build the economy of tomorrow.
The Day After Tomorrow. Designing COVID-19 Bailouts for a Sustainable Recovery
By: Agustin Redonda – Council of Economic Policies
