‘Green’ focus could improve post-coronavirus recovery

A focus on the environment throughout the coronavirus-related recovery could foster a better economic outcome, analysis shows.

Research published Tuesday by the Oxford Smith School of Enterprise and the Environment concluded that by implementing climate-friendly, green policies in COVID-19 economic recovery packages, governments and policymakers can deliver better results — including the creation of more jobs and increased long-term cost savings — than through more traditional stimulus.

"Recovery packages that seek synergies between climate and economic goals have better prospects for increasing national wealth, enhancing productive human, social, physical, intangible, and natural capital," a report of the research said.

The research, led by Cameron Hepburn, a professor at the University of Oxford, focused on the reduction of greenhouse gas emissions as its key definition of green projects.

Examples of such projects include investment in renewable energy production. The research noted that, over the short term, twice as many jobs per dollar are created through the construction of clean energy infrastructure as is for fossil fuel infrastructure.

The reports makes a number of other policy recommendations, including "investment in education and training to address immediate unemployment from COVID-19 and structural shifts from decarbonization."

The research team, which also included Nobel prize winner Joseph Stiglitz and climate economist Nicholas Stern, assessed more than 700 stimulus policies and surveyed 231 experts, including senior officials from finance ministries and central banks, from 53 countries.

"Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?" is available on the Smith School website.

Separately, a report by S&P Global said the coronavirus pandemic is likely to further increase focus on environmental, social and governance factors.

In its latest Infrastructure Finance Outlook, the ratings agency highlighted that, broadly, the COVID-19 pandemic “only underscores the increased importance of (ESG) risk factors.”

S&P Global expects some environmentally positive behavioral changes to arise from the coronavirus crisis, including structural changes to how people travel reducing oil demand and therefore emissions; remote working across the globe leading to a reduction in business travel; and increased awareness of polluted environments after months of clean air in cities — “something we see already, as some cities favor pedestrians and cyclists over cars in their gradual exit of lockdowns,” the report said.