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Climate friendly policies in times of crisis

Climate friendly policies in times of crisis. An overview of the ‘green’ character of national recovery plans in Europe Mariya Nikolova, ETUI. Overview of the presentation. Making the case for green measures as part of the national recovery packages

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Climate friendly policies in times of crisis

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  1. Climate friendly policies in times of crisis An overview of the ‘green’ character of national recovery plans in Europe Mariya Nikolova, ETUI

  2. Overview of the presentation • Making the case for green measures as part of the national recovery packages • Recommended size and nature of green measures • Green fiscal stimulus in the EU: EERP, FR, GE, IT • Concluding remarks climate friendly policies in the national stimulus packages

  3. The case for green measures as part of national recovery plans • While global economy is in serious but temporary decline, climate change poses a permanent and much more severe risk to human development and prosperity • Wide-spread consensus that current crisis and governments’ involvement in recovery initiatives represent unique opportunity to tackle both challenges at the same time climate friendly policies in the national stimulus packages

  4. Recommended size and nature of green measures How much should be allocated to ‘green’ initiatives in the stimulus packages? • According to N. Stern around 20% of total spending should be directed to ‘green’ measures over the next year • UN Green Economy Initiative calls on high income OECD countries to spend at least 1% of GDP to reduce carbon dependency over the next two years • Authors Ecofys/Germanwatch study opt for at least half of the stimulus packages to be devoted to low carbon investments → So far, only 15% of the total of the announced fiscal stimuli by the G20 governments is dedicated to green measures climate friendly policies in the national stimulus packages

  5. Recommended size and nature of green measures What kind of ‘green’ policies should be supported? • No consensus on what actually is a ‘good’ green investment • Some criteria & results: • Edenhofer & Stern: speed of decision and implementation, large multiplier effect and long-term climate benefits → Improving energy efficiency, upgrading the physical infrastructure and supporting clean technology markets • Ecofys/Germanwatch’ Effectiveness factor based on ST and LT considerations: → Renewables, following by energy efficiency score best / low interest loans are best instruments • Grantham Institute: timeliness, targeting of measures, time-limitedness → Energy efficiency measures come out first, followed by renewables climate friendly policies in the national stimulus packages

  6. Green fiscal stimulus in the EU • Overview of the ‘green’ measures included in the economic stimulus packages of the EU, FR, GE, and IT • Some of the findings are based on TURI survey for report on the fiscal packages • Comparison of assessments given to these policies by two main reports (HSBC and Ecofys/Germanwatch) • Vast differences in evaluation between HSBC and Ecofys/Germanwatch reports due to different methodology climate friendly policies in the national stimulus packages

  7. European Economic Recovery Plan (EERP) • Announced in November 2008: 200bn euro in total whereas 30bn directly from EU budget and the EIB • Focus of climate friendly measures is on investments for energy and climate change related infrastructure, energy efficiency in buildings, ‘green products’, research and innovation to stimulate development of clean technologies for cars and construction through PPPs • According to HSBC: this amounts to 64% of the total EU stimulus • However: → so far, only 5bn euro stimulus package is actually agreed (March 2009) among others devoted to renewables, the electric grid and CCS, out of which only 33% is effectiveness adjusted expenditure (Ecofys/Germanwatch) → the share of combined Commission and national MS funds comes down to less than 10% (HSBC) → total EU green spending represents only around 11% of the global total green investments climate friendly policies in the national stimulus packages

  8. France • ‘Revival Plan’ adopted in December 2008 • Green measures: Investment in renewables, energy efficiency of buildings, local public transport and railway infrastructure, quality and security of electricity distribution and regional electricity grids • HSBC report: 21,2% share of green measures, highest in EU • Ecofys/Germanwatch: only around 6% effectiveness adjusted expenditure because positive incentives are to a large part offset by negative ones climate friendly policies in the national stimulus packages

  9. Germany • Stimulus plan adopted in November 2008 and in February 2009 (biggest fiscal recovery programme in Europe) • Green measures: focus on energy efficiency in both private and public buildings as well as in transport • Government estimates that 18% of total packages is ‘green’ • Ecofys/Germanwatch: 15% (includes measure outside stimulus packages aimed at extending low-interest loans for off-shore wind parks) , HSBC: 13,2% climate friendly policies in the national stimulus packages

  10. Italy • After the Emergency Package adopted in November 2008, three subsequent legislative acts in reaction to the crisis were passed in January, February and March 2009 • Green measures: only covering the transport sector (local public transport, railway system, subsidies for efficient vehicles without emission) and energy efficiency in buildings • HSBC: 1,3% (based on November and January legislation), Ecofys/Germanwatch (based only on 2009 legislation): - 6% due to predominantly negative incentives i.e. construction of new roads climate friendly policies in the national stimulus packages

  11. Overview climate friendly policies in the national stimulus packages

  12. Concluding remarks I Positive aspects: • Although stimulus packages quite divergent, energy efficiency measures with a focus on buildings (about 1/3 of all investments) can be found in almost all European recovery plans – rated first according to most criteria of a ‘good’ green investment in the current crisis • Underinvestment in renewables but foundations already in place in Europe as a.o. a reaction to the energy crisis in ’70 climate friendly policies in the national stimulus packages

  13. Concluding remarks II Negative aspects: • Almost all studies conclude that the green stimulus so far is not enough to lay the foundations for a low carbon economy in Europe • Short-term objectives and decidedly non-green aspects such as intensified investment in road infrastructure and new cars purchasing without making fuel efficiency at a certain high level a necessary condition can lock in non-sustainable technologies and practices • In Europe (10%) the green stimulus is smaller than those of SK (80%), Australia (40%), China (34%), Japan (15%) and the US (12%) and even the world average (appr. 15%) • The current crisis could delay progress on environmental policies climate friendly policies in the national stimulus packages

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