When leaders of the world’s largest economies meet tomorrow at the G-20 summit in London, they will have an opportunity to turn some $2 trillion of stimulus funding into the foundations of a global clean energy economy.
Unfortunately, there is very little chance of that actually happening.
"I haven’t heard anything that suggests the green recovery and climate change are a major part of the [G20] agenda," said Professor Robert Watson, chief scientific adviser for the UK Department for Environment, Food and Rural Affairs.
According to a draft G-20 statement reported in the Guardian, low-carbon growth receives only a brief and bland mention in resolutions 22 and 23. That’s out of a list of 24. It reads:
"We will work together to explore further measures to promote low carbon growth and build sustainable economies. We reaffirm our commitment to … reach agreement at the UN Climate Change conference in Copenhagen in December."
James Hansen, climate scientist and director of NASA’s Goddard Institute for Space Studies, isn’t impressed:
"If this is the best they can do, then their ‘planet in peril’ rhetoric is probably just that – empty rhetoric."
What a wasted opportunity. And a brand-new report by Lord Nicholas Stern, Toward a Global Green Recovery: Recommendations for Immediate G-20 Action, provides more proof of that.
In it, Stern, author of the influential 2006 Stern Review, makes the case that G-20 nations should commit roughly 20 percent of their stimulus dollars to low-carbon investments. Why? One reason is for short-term crisis relief.
Green recovery programs, the report explains, would "stimulate immediate private investment in low-carbon technologies, thereby developing new opportunities for employment, innovation, and wealth creation." All at a time when inputs are relatively cheap and resources and workers are available.
The other is longer term. Green investments would ensure fiscal sustainability after the economy recovers. From the report:
"Ensuring that national recovery programs are ‘green’ makes sense not only because climate change pose a far more serious threat to the global economy in the long term than do temporary economic downturns.
"It makes sense because otherwise, once the world economy recovers, sharply increasing energy prices are likely at some stag to trigger subsequent slowdowns. Without the transition towards a low-carbo global energy system, the next economic crisis is pre-programmed. ‘Green recovery programs are not only an option for sound and effective crisis relief; they are a precondition."
So far, G-20 nations have announced fiscal packages worth $1.6 trillion. According to Stern’s estimates, at least $300 billion of that should be green. (Incidentally, that’s roughly the same $200 billion to $350 billion per year that McKinsey & Company has said is required to put the whole world on a low-carbon growth path.)
To date, G-8 states have dedicated 15 percent of their stimulus packages on average to low-carbon measures, with great differences across countries. Most are far below the 20 percent goal, while a few, such as South Korea and China, are well above it. They’ll be spending as much as 80.5 percent and 34.3 percent of their stimulus packages, respectively, on green initiatives.
The G-20 nations represent two-thirds of the world’s population, and three quarters of global GDP, energy consumption and carbon emissions. They should do better. And they have the means.
Stern’s approach is seven fold:
- Increasing energy efficiency
- Upgrading physical infrastructure, including smart grids and public transportation
- Supporting clean technology markets, including expanding feed-in tariffs, renewable portfolio standards and production tax credits
- Inititating flagship projects, such as concentrating solar power
- Enhancing international R&D, including tripling total R&D spending on clean energy
- Incentivizing investment, namely providing a strong commitment to pricing carbon across all sectors
- Coordinating G-20 efforts
None of these recommendations is new or original, and Stern isn’t alone in urging the G-20 to embrace them. Take the new "Task Force on Low-Carbon Economic Prosperity," for example.
Formed this week in advance of the G-20 summit by 52 major companies and 34 experts and organizations, its aim is to get nations to "put low-carbon growth strategies at the heart of economic stimulus measures now being implemented." (Read the group’s open letter letter to UK Prime Minister Gordon Brown.)
The companies include: Nike, Alcoa, Intel, Dow Chemical, Duke Energy, Deutsche Bank AG, Citi, Cisco and British Airways. As these corporate giants see it, climate action is both a short-term recession fix and a way to "deflect economic growth onto a more sustainable, low-carbon path for the longer term."
Expect these recommendations, or rather warnings, to fall on deaf ears. Some G-20 nations allegedly have fears that committing more global stimulus to green projects would provide an excuse for protectionist measures, reports the Guardian. Others say stronger climate action by the G-20 would mean stepping on the toes of the UNFCCC climate negotiations, now under way in Bonn.
That sounds like nonsense.
The G-20 summit could prepare the ground for a successful post-Kyoto agreement in Copenhagen in December 2009, argues Stern. It’s common sense:
"Given that past negotiations have made little progress, any vehicle that could facilitate the process towards reaching a successful post-Kyoto agreement in Copenhagen is desirable. The fiscal packages currently being prepared and reviewed by G20 nations represent such a vehicle. Fiscal spending on the decarbonization of the energy system would lower the cost of reaching given reduction targets and hence facilitate their agreement."
You can find his argument for coordinated G-20-UN action in graph form, figure 3, page 17. It’s titled: "The G20 London Summit as a gatekeeper for short-term recovery and long-term growth."
What it always comes down to is this. Climate action will be far cheaper than doing nothing. At this moment in time, it would also help dig the economy out of recession.
It really is that simple.
And with that, a final word, from Mr. Stern:
"While the world economy is in temporary decline, dangerous climate change poses a permanent and far more serious threat to human development and prosperity."
See also:
Lord Stern’s Call for a $400 Billion "Green" Fiscal Stimulus
How to Pay for a Global Climate Deal
New Stern Warning: Unabated Climate Change Would Dwarf Financial Crisis
Creating the Next American Economy
$3.8 Trillion: The Annual Price America Will Pay for Dilly-Dallying on Climate Change
