25 March 2020

EurActiv: Governments urged to attach green strings to long-term coronavirus recovery plans

Governments and financial institutions are under growing pressure to make economic bailouts designed to counter the coronavirus pandemic dependent on climate action in the longer term.

Over the last week, hundreds of billions of dollars worth of stopgap measures have been announced to fight the coronavirus and limit economic shortfalls.

In the US, industries are scrambling for a share of a $1 trillion-stabilisation package with the aviation industry expected to receive a large chunk.

Last week, the European Central Bank (ECB) announced a €870 billion emergency bond-buying programme to stabilise the euro zone economy until the end of the year – the equivalent of 7.3% of the euro area’s GDP.

In contrast, the EU Commission has promised a trillion euros over a decade to finance its Green Deal and support the union’s plan to be the first climate neutral continent by 2050.

Resounding calls have been made for governments and international financial institutions to put the clean energy transition at the heart of stimulus packages, once the human tragedy eases.

ECB bond-buying has no green conditions

But short-term measures designed to stabilise the economy are so far doing little for the transition.

In Europe, the bond-buying programme announced by the ECB – one of Europe’s most powerful institutions – follows the bank’s current purchasing criteria, which proscribes the bank from preferring one sector over another, instead buying what is available on the market.

An ECB spokesman told CHN the bank’s portfolio “will have an increasing number of green bonds” since these are rising on the market, but their total numbers remain limited.

Stanislas Jourdan, head of Positive Money Europe, a campaign group that has called for the ECB to do more to promote green finance, said the bank committed to a mass purchase of bonds “without any climate considerations”.

European Green Deal

Under the Green deal, the EU committed to become climate-neutral by 2050, increase its 2030 climate target, ensure no-one is left behind in the energy transition and transform key sectors such as constructing and renovating buildings, agriculture and transport.

How quickly the promised stimulus money can help boost clean energy investments is, however, up for debate.

“Right now there is much competition for that stimulus money,” Samantha Gross, a fellow in the Cross-Brookings Initiative on Energy and Climate, told CHN, making a focus on clean energies and technologies “challenging” in the short-term.

Full article on EurActiv

 

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