How Can Stimulus Packages Help Solve Climate Change?

The $2 trillion stimulus package passed by U.S. lawmaker is the largest stimulus bill in modern history. For environment and renewable energy activists, the outcome of the relief bill is mixed, although some of them called it a “draw” with polluting industries.

The aviation industry is one of the most significant beneficiaries, with about $58 billion designated for commercial and cargo airlines, as well as airline contractors. The $17 billion that is meant to be “critical for maintaining national security” seems to be crafted largely for the airplane producer Boeing, according to the Washington Post. “There are no similar provisions in the bill for other large industries,” said Doug Parker, the CEO of American Airline.

By the looks of it, the relief bill is not even close to tipping over to the side of sustainable development. Sustainable industries such as wind and solar industries face a stark reality: not only are they far from getting the benefits proportional to those received by the aviation industry, but they are also at risks of losing as much as 50 percent of residential jobs this year, according to an estimation. Tens of thousands of jobs are threatened in the solar industry due to stay-at-home orders and supply chain issues. The implication is troubling, especially when we consider the fact that America’s green economy is worth $1.3 trillion.

As governments start to prepare for economic crisis that can ensue in the following years, Jeff Tollefson highlights that the pandemic could be an unforeseen opportunity to develop renewable energy sources and advance climate goals: an aspect that has not been taken into consideration by the U.S. Congress so far.

Massive economic bailouts can be used to encourage the development of renewable energy and the construction of green infrastructure — experts learned these lessons from the global economic crisis in 2008. After the crisis, governments devote sizeable portions of their stimulus packages to achieve environmental goals. For example, the European Union uses over two-thirds of its total stimulus spending to encourage energy efficiency. The US stimulus programme enacted under Barack Obama’s administration allocated $16.8 billion for researching energy efficiency and developing renewable energy, as well as investments in green infrastructure.

These measures went a long way in creating employment opportunities and reducing carbon emission. A report written by the International Labour Organization (ILO) asserts that money invested in clean energy can yield twice as many jobs per dollar invested in comparison with the traditional fossil fuel-based energy. And, investments in sustainable power and energy efficiency can create lasting employment gains. In terms of pollution, energy-related carbon dioxide emission in the U.S. decreases from 5,392 million metric tons in 2009 to 5,269 million metric tons in 2018, despite the growing economy.

Although green stimulus plans did not eradicate climate problems, there is no doubt that factoring sustainable goals such as reducing emissions into economic recovery plans can be crucial to resolving climate change in the long term. It is, therefore, logical to use past stimulus programmes as a starting point to construct future plans. In fact, the blue prints of this kind of green stimulus packages can be found in the EU’s Green Deal and Germany’s Climate Action Programme. These plans incorporate plans that touch all sectors of the economy and offer multiple options for policymakers to outline long-term recovery plan.

Unfortunately, the U.S. lawmakers moved in the opposite direction as the pandemic struck, putting forward an incredibly short-sighted plan that focuses on short-term reliefs. The abandonment of a proposal that would have required the airlines receiving federal aid to begin offsetting emissions by 2025 epitomizes the carelessness of the lawmakers. According to Karen Pittel, head of the Ifo Center for Climate, Energy and Resources in Munich, denigrating the importance of climate projects could prompt emissions to bounce back at even higher levels, and could make it even harder and more expensive to reach climate targets while hampering the long-term economic recovery.

To make matters right and take full advantage of the transformative power of stimulus packages, the U.S. government should take responsibility to support sectors that produce renewable energy. Considering that the pandemic is still taking place, the most important objective is to minimize the loss of employment opportunities in sustainable industries by providing separate financial aids to the solar and wind industries.

At the same time, the government must not loosen emission requirements for polluting industries. It’s essential to save the industry, but it is also important to do so at a smaller long-term cost — this requires the government to hold industries accountable for the level of pollution and incentivize polluting firms to continue reducing emissions. One possible solution is to negotiate a higher standard for fuel efficiency and carbon emissions in return of the bailout of the industry, just as the Obama administration did.

“With good planning, 2020 would be the year that global emissions peak,” said Glen Peters, research director at the Center for International Climate Research in Oslo.

But the outlook remains complicated and uncertain as how the COVID-19 could influence the climate. Even the seemingly encouraging notion that air pollution is plummeting in major cities is premature and likely an oversimplification of current data, according to Dan Goldberg, an atmosphere researcher at Argonne National Laboratory in Illinois. “I haven’t seen any statistically significant changes in air pollution in most US cities,” he said.

“There is no silver lining to COVID-19,” said Zeke Hausfather and Seaver Wang, climate scientists at the Breakthrough Institute, a research institute in Oakland, California. “The COVID-19 crisis appears likely to cost us more time to act on climate than it buys us,” they added.

If air quality cannot be improved in most cities even in times of social distancing, we have nothing to gain but everything to lose. Industries are in dire need for responsible leadership in governments around the world during this momentous time. There is no better time for the U.S. government to make positive changes in the world and showcase its determination to combat climate change by doing things right.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s