How a post-pandemic stimulus can both create jobs and help the climate

This article was a collaborative, global effort by Hauke Engel, Alastair Hamilton, Solveigh Hieronimus, and Tomas Nauclér, with David Fine, Dickon Pinner, Matt Rogers, Sophie Bertreau, Peter Cooper, and Sebastien Leger, representing views from the Public & Social Sector and Sustainability Practices.

 
The tragedy of the COVID-19 crisis has taken much attention away from the threat of climate change, as institutions devoted themselves to protecting lives and livelihoods. Sustaining an effective public-health response remains a top concern for many policy makers and business executives. Severe job losses and revenue declines in some sectors, along with the high likelihood of an economic recession, have also compelled policy makers to mount an unprecedented financial response, which already exceeds $10 trillion, according to McKinsey estimates.

Important as it is to repair the economic damage, a swift return to business as usual could be environmentally harmful, as the world saw after the 2007–08 financial crisis. The ensuing economic slowdown sharply reduced global greenhouse-gas emissions in 2009. But by 2010, emissions had reached a record high, in part because governments implemented measures to stimulate economies, with limited regard for the environmental consequences. The danger now is that the same pattern will repeat itself—and today the stakes are even higher. The period after the COVID-19 crisis could determine whether the world meets or misses the emissions goals of the 2015 Paris Agreement, which were set to limit global warming to 1.5°C to 2°C.

Achieving those goals is a distinct possibility. A low-carbon recovery could not only initiate the significant emissions reductions needed to halt climate change but also create more jobs and economic growth than a high-carbon recovery would. Our analysis of stimulus options for a European country suggests that mobilizing €75 billion to €150 billion of capital could yield €180 billion to €350 billion of gross value added, generate up to three million new jobs, and enable a carbon-emissions reduction of 15 to 30 percent by 2030. Such a package need not involve economic compromises. A recent survey of top economists shows that stimulus measures targeting good environmental outcomes can produce as much growth and create as many jobs as environmentally neutral or detrimental measures.¹ But a high-carbon recovery could make it hard to meet the goals of the Paris Agreement, and heavy relief and stimulus spending might leave governments too debt-strapped to pay later for emissions cuts.

Finding a low-carbon, high-growth recovery formula isn’t easy. It requires assessing stimulus measures with respect to complex factors, including socioeconomic impact, climate impact, and feasibility. But our analysis highlights the chance for policy makers to assemble a package that quickly creates jobs and economic demand, produces steady growth, and accelerates the uptake of zero-carbon technologies. Governments can use the framework described in this article to design and carry out a low-carbon recovery agenda that could meet the immediate economic needs and improve the long-term well-being of their people.

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Πηγή: mckinsey.com