Green stimulus

 With G20 countries pledging to work for a green, low-carbon global economic recovery, a U.N.-mediated climate change agreement by the end of 2009 that can win the support of major emitters of greenhouse gases appears one step closer. The members of this economic group represent about three quarters of the global gross national product, energy consumption, and carbon emissions. It is welcome, therefore, that at the G20 London summit, they promised to make carbon emission co ncerns central to the working of their massive fiscal stimulus packages. If they devote even a part of the whole — over six trillion dollars, including multilateral development bank funds — to facilitate green growth, it could set the world economy on a low carbon path. There are many areas in which governments can intervene effectively. Public spending on infrastructure, including transport, tax and credit policies to promote climate-friendly investment, and setting energy efficiency standards are some. These policies will have a significant fiscal multiplier effect if they encourage similar moves in the private sector. In the present depressed times, these measures could save jobs and create new ones, with the bonus that they will be benign with regard to the environment.Some G20 members may draw inspiration from others who are ahead in the quest for low-carbon growth. If Germany, a world leader in renewable energy and environmental technologies employing about 1.8 million people in green technology areas, raised its output of environmental goods by an impressive 27 per cent during 2005-07, China's National Development and Reform Commission has won recognition for setting apart, under a stimulus package, nearly $100 billion for rail infrastructure and $70 billion for electricity grid expansion. Investing in upgraded electricity grids is essential to integrate expanded renewable sources of energy, notably wind. There are other key areas for governmental investment — retrofitting public infrastructure such as schools and offices with green technology, extending public transport systems, adopting green procurement policies, incubating renewable energy technologies, building demonstration projects for carbon capture and storage, and pursuing substantial afforestation. The consensus at the G20 inspires hope that it will help address the twin crises confronting all economies — climate change and the economic downturn. The good start needs to be consolidated quickly by national governments and multilateral bodies. A green recovery is vital to meeting climate change mitigation and adaptation challenges successfully. 

 

 The Hindu, 10th April 2009