In 2020, the colliding crises of the COVID-19 pandemic and increasingly visible climate change led many governments, politicians and campaigners to adopt the slogan “build back better,” promising to use economic recovery funds to accelerate the transition away from fossil fuels and create societies that are more resilient to extreme weather and other climate-related shocks.
But that hasn’t happened yet. A study published March 10 by the U.N. Environment Program, in partnership with the University of Oxford, found that of the $14.6 trillion committed by governments of the world’s 50 largest economies in 2020, just 2.5% was on programs likely to decrease greenhouse-gas emissions, lower pollution or restoring degraded natural systems.
The figures do not include the $2 trillion in climate spending promised by U.S. President Joe Biden, the details of which are still being hammered out. Nor does it include the European Commission funds of those E.U. member states that have not yet announced how they will allocate their budgets. Those un-declared funds are worth more than $2 trillion, according to the report, and with the E.U. leaders driving the green recovery agenda, they are likely to increase the proportion of global recovery spending that is directed towards reducing emissions.
Still, the report “clearly shows that we are not yet building back better when it comes to recovery spending,” writes UNEP executive director Inger Andersen. “On the whole, so far global green spending does not match the severity of the three planetary crises of climate change, nature loss, and pollution, leaving significant social and long-term economic benefits off the table.”
Of the total amount analyzed in the UNEP report, $1.9 trillion was classified as “long term recovery” spending; green recovery initiatives made up 18% of that. Brian O’Callaghan, head of the Oxford University Economic Recovery Project, said much of the remaining 82% represented missed opportunities for governments to speed up the fight against climate change. “Governments in many cases are just trying to return to the old normal,” he told a launch event for the report. “It seems like the world is trying to put out a house fire with a garden hose when a perfectly good fire hydrant is available just next door.”
Green investment commitments in 2020 were not equally distributed among countries, with most of it driven by “a small set of high-income nations.” Based on proportion of GDP, Spain, South Korea, and the U.K. led on green spending during the pandemic—though that is partly because these countries have announced the allocations of greater shares of their recovery plans than most countries so far. But when considering green spending as a proportion of recovery funds so far announced, Denmark, Finland, Germany, France, Norway, and Poland led.
The analysis doesn’t mean there will be no further pandemic-related green spending. The report argues that the window for green recovery investment is “only now opening” and urges governments to prioritize five areas for investment in 2021: green energy, green transport, green building upgrades & energy efficiency, green research and development, and restoring and protecting natural eco-systems and the services they provide.
“Trillions in fiscal spending [still to be announced] provide the greatest opportunity in decades to reorient for the future,” it reads. “Citizens, businesses, policy makers, and politicians must hold each other to account to ensure that the opportunity is not wasted.”