As the world still grapples with Covid-19, governments are putting into place ‘recovery’ or ‘stimulus’ packages to bring the economy back on its feet. Civil society, UN agencies, and even many political leaders have called for these packages to steer economic activity into directions that are more ecologically sensitive, building on the realization that it was our terrible rift with the rest of nature that led to the Covid outbreak (and many other such disease incidents in the past). So it's well worth assessing: just how ‘green’ are these packages?
In an interesting series of reports, a group called Vivid Economics has presented as part of the Finance for Biodiversity (F4B) process, present such an analysis. The latest, released in December 2020, analyses the packages of 25 countries, covering all continents (though only one from Africa), and economies at various stages of ‘development’ (though none that are very small; most are G20 countries). This encompasses a package of about US$13 trillion. The analysis looks at what the packages are proposing for sectors like agriculture, industry, waste, energy and transport, and whether the measures included will have a positive or negative impact on carbon emissions and nature.
Some of the key results of the assessment are:
Economic stimulus packages … present an opportunity to support these sectors through the Covid-19 crisis, while also boosting global resilience to mounting climate and biodiversity risks. The Greenness of Stimulus Index (GSI) shows that governments to date have largely failed to harness this opportunity, though a select few are rising to meet the challenge.
Announced stimulus to date will have a net negative environmental impact in 15 of the G20 countries and economies, and in three of the five other analyzed countries. Among more developed countries, the US stimulus package stands out as the most damaging.
Emerging economies most dependent on environmentally-intensive sectors and without strong regulatory oversight have the biggest task to turn their stimulus green and have so far failed to step up. China, India and Mexico have announced stimulus measures that will damage the environment.
In the green stimulus to date, nature and biodiversity have been particularly neglected.
The stimulus in Western Europe, South Korea and Canada offers promise, with at least a portion of spending likely to be nature-friendly, coupled with green infrastructure investments in energy and transport. The ‘Next Generation EU’ recovery package is the most environmentally friendly stimulus package.
It should be noted that in the case of the USA, the situation may be a bit different now with Biden's recent policy shifts away from Trump’s climate-denialism, but it’s unlikely that overall there will be a tectonic change.
Its overall conclusion is sobering: “Unfortunately, stimulus policies that increase cash flow for businesses make up the bulk of total stimulus to date. Because the business-as-usual economy is environmentally unsustainable, and unconditional rescue support for business perpetuates the norm, this type of spending exacerbates negative environmental trends.”
While this conclusion is alarming in itself, the situation is probably even worse. Some of what the report takes to be positive only looks good on the surface; deeper down, there are serious environmental and socio-economic impacts that need to be understood and factored in.
For instance, while India’s overall stimulus package is considered environmentally detrimental, some aspects are said to have helped it become greener. This includes afforestation and renewable energy. Both of these have significant potential as part of a green stimulus, but it all depends on how they are conceived, who implements them, and what impacts they have. For decades now, a lot of afforestation in India, especially as carried out by its centralized forest bureaucracy, has tended to be monocultural rather than biodiverse, and carried out on lands that are not necessarily meant to be forest such as natural grasslands, deserts, etc. often classified as ‘wastelands’. Such lands often contain wildlife and are a major source of livelihoods for the poorest sections of society. Both are negatively impacted by such afforestation. There are of course also examples of ecologically and socially sensitive afforestation, or even more, regeneration, especially where communities have been centrally involved or there is a sensitive forest official. But these are uncommon, and when a massive national program for afforestation comes with its own rushed timelines and lack of process to empower local communities, chances are that it will be ecologically and socially problematic.
Energy has similar considerations. India’s push for renewable energy in the last few years has been, at first glance, very impressive. Enough to earn its Prime Minister a UN award for ‘Champion of the Earth’ in 2018. But this massive expansion hides two very inconvenient truths. One, that simultaneously India’s fossil fuel-based energy infrastructure continues to expand (including, for instance, coal mining in some of its most biologically diverse forests, ironically as part of a ‘self-reliant India’ package!). RE is not replacing fossil fuels, it is supplementing them, so the net gains for the climate or other environmental goals are zero or negative. Secondly, most of the RE push has been for mega-parks, massive installations of wind and solar that take up huge amounts of land, displace communities or their livelihood activities, disrupt wildlife migration routes or feeding sites. India’s latest budget (February 2021), has, for the most part, serious ecological illiteracy, and will further substantiate the conclusion of the GSI report (based on previous ‘self-reliant India’ packages announced in mid-2020), that India’s stimulus packages will be damaging to the environment.
The methodology adopted in the assessment characterizes investments (bailouts, loans, grants, subsidies, tax reductions) or policy actions (such as regulation and deregulation of environmental measures) in positive or negative ‘policy archetypes’, and measures the overall greenness of different sectors on a scale of 1 (most pro-environmental) to -1 (least environmental). This is called the Greenness of Stimulus Index (GSI). The problem is that there is a lot of reductionism involved. So for instance, biofuels are considered to be positive in the energy field, whereas we know from reports around the world that large plantations of these have often been at the expense of natural ecosystems and/or community livelihood resources. Similarly, ‘nature-based solutions’ like afforestation are considered positive, and can indeed help in ecological restoration with substantial employment generation (the report calculates 7 million additional jobs). But as illustrated above by the example of India, these have been criticized as often undermining local livelihoods and governance if the political and social aspects of justice are not built into them. Several other actions, such as restoration of wetlands, are likely to mostly be positive from an ecological point of view, though here too the equity or justice considerations could be serious if local communities dependent on the wetlands lose their access during and after restoration.
Aggregating the aspects that have been calculated while leaving out others is also a serious limitation of this approach. Switzerland is cited as having a ‘good underlying environmental performance and significant green stimulus measures’, resulting in a positive GSI score. It is not quite clear, but I would be surprised if this calculates the enormous ecological footprint of the Swiss, with their intensive consumerist lifestyles, in the rest of the world. If this is added on, will Switzerland still be in the positive score? Does its stimulus package significantly reduce its global footprint? Surely indicators relating to this also need to be included in the assessment. If done, the conclusion that the EU recovery package is the ‘most environmentally friendly’, may have to be revised.
If flaws like these can be plugged, for which a more nuanced and sophisticated analysis is needed, and the temptation to aggregate information into single scores by which countries can be compared is avoided, then the GSI approach does have its merits. Undoubtedly we need independent commentary on how countries are doing with their stimulus packages, on multiple fronts: environment, human rights, democracy, livelihoods and employment, equity and justice. Whether governments listen to such analysis or not, civil society and research institutions have to put it out, to create more public awareness, a base for people’s advocacy and mobilization, and information on which at least sensitive government agencies or individuals can act.
Also crucial is to propose and advocate alternative stimulus or recovery proposals. An example is Hawaii’s Feminist Economy Recovery Plan, which focuses on a shift away from military, tourism and luxury development towards ‘green jobs’ in RE, energy efficiency, environmental management and construction jobs that promote gender and racial equity. Several elements of the Green New Deal proposals in the USA, UK and some other countries, also went beyond business as usual (though there remain fundamental flaws, such as a weak approach to North-South inequities, and to elite consumerist lifestyles). Civil society groups in India and South-East Asia have suggested many ways to emerge from Covid with ecological and livelihoods focus at the core. Unfortunately, these alternative approaches have for the most part been ignored in the official packages in most countries.
Official recovery and stimulus packages have to be assessed from multiple perspectives of ecological resilience, socio-economic equity, justice and equality, the creation of conditions for dignified well-being for all humans and all other life to thrive. The stimulus has to be not only to the economy but also to tackle widely evident ecological collapse and abysmal inequalities of various kinds; or rather, the economy needs to be embedded within these objectives. They have to be not only green but of multiple hues and shades, incorporating all these aspects into rainbow recovery and stimulus. Unfortunately for most governments, it is as if the economy, with neoliberal growth as its ideological base, is the only thing that needs to be stimulated. People’s movements and civil society have their work cut out, to expose, resist, and block these ' businesses as usual’ packages, and propose, promote, and practice radical alternatives to them.