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Nations calls for green recovery to revive virus-hit economies

With major economies drawing up enormous economic packages to cushion the shock of the Coronavirus pandemic, many investors, politicians and businesses see a unique opportunity to drive a shift to a low-carbon future.

So far, governments have focused on emergency economic relief as an estimated 81% of the world’s workforce has been hit by full or partial lockdowns, the report said.

But as governments move from “rescue” to “recovery” mode, the authors identified sectors that could provide particularly strong returns in terms of both rebooting economies, creating jobs and advancing climate goals.

Industrialized countries should focus on backing “clean physical infrastructure,” such as solar or wind farms, upgrading electric grids or boosting the use of hydrogen.

Massive programmes of green public investment would be the most cost-effective way both to revive virus-hit economies and strike a decisive blow against climate change.

German Chancellor Angela Merkel and International Monetary Fund Managing Director Kristalina Georgieva called for green recoveries last week, and the concept has emerged as a political fault line from the United States to India and South Korea.

In lower- and middle-income countries, support for farmers to invest in climate-friendly agriculture came out ahead in the study, due to run in the Oxford Review of Economic Policy.

Among the worst-performing policies: bailing out airlines without attaching climate conditions.