U.S. Only 6th among G20 Nations for Green Stimulus Investments

Green stimulus investments have the potential to yield a greater number of jobs and greater long-term prosperity than traditional stimulus investments, according to a new study presented at the recent G20 summit. The report examines the stimulus packages passed in the G20 countries, particularly their relative emphasis on spending related to sustainability. Since G20 members are responsible for three-quarters of the world's wealth, energy consumption and greenhouse gas emissions, the measures taken by these countries represent the forefront of the effort to combat global climate change. In addition, the study argues that these investments are the most effective use of stimulus funds.

Study authors Ottmar Edenhofer and Lord Nicholas Stern of the Potsdam Institute for Climate Impact Research and the Grantham Research Institute on Climate Change and the Environment, respectively, break down international spending and find that green efforts represent about 15 percent of global stimulus investment. South Korea devoted the largest share of its recovery package to green efforts, 80.5 percent, followed by the European Union with 58.7 percent. The U.S. ranked sixth in green spending as a share of its recovery, with 11.5 percent.

The study also compared green stimulus spending to 2008 GDP. China led the G20 countries in this metric, investing an amount equal to 4.8 percent of its GDP to green initiatives. The U.S. ranked fourth, investing about .8 percent of its GDP in these efforts. The study's authors contend that the current level of green investments will not be sufficient to halt climate change and maximize the return on stimulus investments.

Edenhofer and Stern recommend that the G20 nations use their current and future recovery packages to invest in seven strategic areas related to fighting global climate change and achieving sustainable growth.

These areas include:

• Increasing energy efficiency through programs that offer loans to homeowners and businesses to increase energy efficiency in buildings, stricter fuel efficiency standards and promoting the shift to electrification;
• Upgrading physical infrastructureincluding flexible and capable electrical grids, public transportation, efficient freight transport systems, as well as improving international technology transfer and financing for large-scale infrastructure projects;
• Supporting clean energy markets by providing feed-in tariffs, renewable portfolio standards production tax credits, guarantees and loans for clean energy technology projects;
• Initiating flagship projects including large-scale demonstration projects for clean fuel and energy technologies and research communities to support international and cross-institutional projects;
• Enhancing international R&D by at least tripling total investment in research on clean and renewable energies, as well as establishing publically financed venture capital funds that target clean energy startups;
• Incentivizing Investment in technology and processes that ensure low-carbon production by instituting consistent carbon-pricing policies; and,
• Coordinating G20 efforts by refraining from stimulus provisions that would stifle international trade in cleantech markets.

Towards a Global Green Recovery: Recommendations for Immediate G20 Action is available at: http://www.pik-potsdam.de/globalgreenrecovery