As US House Democrats and Senate Republicans try to reconcile plans for next-round fiscal stimulus, the proportion of “green” allocation remains in flux. Elsewhere China, which tops the US for first rank in carbon emissions, has largely leaned on more traditional stimulus, including resource-intensive infrastructure projects.
However, many other major governments have shown leadership in building green spending into their 2020 stimulus plans.
The UK government this week pledged GBP350mn for its self-described “green” pandemic recovery, more than 80% of which is allocated to spending on clean energy (like hydrogen and carbon sequestering) and to making heavy industry less carbon intensive or more recyclable. Germany is another notable green spender, with around 30% of its EUR 130bn in stimulus linked to carbon reduction.
The broader European Union has stepped up too, with green spending accounting for a majority of its landmark EUR 750bn rescue package. The Recovery and Resilience Facility will allocate EUR 672.5bn in funding to green and digital technologies. Stepping back, the broader EU package (which includes the 2021-27 budget) dedicates 30% to climate spending.
Asia is also contributing. South Korea last week announced a USD 95bn “Korea New Deal” spending plan and pledged to go net-zero emissions by 2050. Alongside more traditional fiscal support, Seoul will put money into key green and digital sectors, such as remote medical services, work-from-home 5G infrastructure, smart electric grids, and electric mobility infrastructure.
In Japan, stimulus has largely focused on emergency support. However, the cabinet last week outlined green measure as part of its FY21 budget, including a start towards funding de-carbonization, promoting green infrastructure and renewable energy, and cleaning marine plastic pollution.
CIO expects this growing government-level focus on green initiatives to help seed emerging green-oriented industries and help draw more private sector investment. Many of the areas of funding also overlap with tech themes we have identified as likely been accelerated by COVID-19.
In the US, Presidential candidate Joe Biden released an infrastructure plan that includes green spending. For more, read the report: Biden’s infrastructure proposal —a look at the future, 16 July, 2020.