Full Title: The Greenest Stimulus Is One that Delivers Rapid Economic Recovery
Author(s): Noah Kaufman
Publisher(s): Columbia University Center on Global Energy Policy
Publication Date: June 15, 2020
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As governments plot their responses to the COVID crisis, it’s difficult to find an influential voice who is not calling for economic stimulus legislation that simultaneously aims to achieve climate change goals. As International Monetary Fund chief Kristalina Georgieva put it: “We are about to deploy enormous, gigantic fiscal stimulus and we can do it in a way that we tackle both crises at the same time.”
After all, governments will spend trillions of dollars to put people back to work. This could be a once-in-a-generation opportunity to shape massive government expenditures in a lower-carbon direction.
Europe appears poised to take this advice, with the European Commission crafting a “Green Deal” at the center of a recovery package. Many European countries have strong climate policy frameworks in place, including emissions regulations and net zero targets. In these countries, clean energy investments within economic stimulus packages can combine with these existing policy frameworks to enable even faster and cheaper decarbonization.
Here in the United States, the situation is starkly different. Expectations for climate progress from economic stimulus should be low, for two (related) reasons. First, the United States has no national climate plan in place, and the ability of clean energy spending to deliver emissions reductions without accompanying emissions regulations is very limited. Second, political opposition can prevent or severely weaken climate measures in economic stimulus for the foreseeable future. The climate measures with a plausible chance of inclusion in economic stimulus will, at best, enable the United States to continue muddling along on an incremental decarbonization pathway while temperatures rise to increasingly dangerous levels.
Of course, incremental progress is better than no progress, and clean energy spending that provides near-term stimulus belongs in economic recovery legislation.