The idea of a green and resilient recovery is now being widely advocated - ensuring stimulus packages can create a double-winby supporting both economic activity today and long-term climate and environmental goals.
A “do no harm” principle in the conditions for funding will attempt to ensure no funds are given to fossil fuels or nuclear power, whilst a “sustainable finance taxonomy” aims to guide funding into technologies meeting one of six environmental objectives, including climate change mitigation.
~~A number of environmental NGOs have raised concerns that the funds are insufficient, the conditions for enforcement are not robust, and that the plan does not end existing support for gas, oil, coal and industrial farming.
~~If approved, the proposed centralisation of debts and the creation of new taxes (including environmental taxes) to partly refund them would arguably be a significant move towards a more federal EU.
China stimulus package
China announced its stimulus package on Thursday last week, with 2 trillion yuan (£226bn) in spending and 4 trillion yuan (£453bn) in subsidies and other cost reductions for businesses, including tax exemptions and reduced social security contributions.
COP26 in Glasgow has been moved to 1-12 November 2021, as a result of the covid-19 pandemic. Confirming the move, Prime Minister Boris Johnson stated the UK government's commitment to "build back better.. a fairer, greener and more resilient global economy."
The Interim Report of the IPPR Environmental Justice Commission has been published, calling for more ambitious targets for environmental goals (including, for the first time, imported carbon), auditing of all projects against a 1.5 degree target, and the creation, in the wake of the covid-19 crisis, of a “green social contract”.
Cambridge Econometrics have provided one of the first modellings of the economic impacts of a green stimulus package for the UK. Their forecasting model finds that a “modest” package of £11bn of green stimulus, if combined with VAT cuts, would be enough to lift the economy out of recession by 2021. They highlight subsidies for companies to invest in renewable energy as having a particularly high impact on both the economy and reductions in carbon emissions.