There’s No Such Thing as Climate-Neutral Stimulus
There’s No Such Thing as Climate-Neutral Stimulus
(Bloomberg) -- Months into a pandemic that has caused unprecedented economic destruction and just days away from an election that will have a profound effect on the future of climate policy, the Roosevelt Institute has issued a new set of recommendations outlining how the U.S. federal government would “solve multiple problems with a single investment of time and money.”
“The choice facing policymakers is not ‘climate-friendly’ policies or ‘climate-neutral’ policies,” the authors write in their report, titled “A Green Recovery.” “All stimulus policies have the potential to affect emissions levels, even if they do not directly relate to climate or emissions.”
Led by Rhiana Gunn-Wright, one of the architects of the Green New Deal and the Roosevelt Institute’s director of climate policy, the authors lay out how stimulus can bring economic relief to the unemployed and disadvantaged, particularly Black people and other people of color, in ways that also reduce emissions. Directed through existing programs meant to alleviate energy poverty and aging infrastructure, relief funding would encourage a permanent transition to a low-carbon economy, the report says.
“When you’re in a recession, a lot of what people are looking for is immediate economic relief and job creation,” Gunn-Wright said. Climate policy hasn’t always “fit that frame” for most people, she added. But that’s a missed opportunity. “There are a number of fiscal policies that can be designed to both reduce emissions, address environmental injustice, and move money quickly” to places where previous stimulus funding has missed, Gunn-Wright said.
The authors’ recommendations cover three main areas: support for clean energy, energy assistance, and infrastructure.
Investing in the clean-energy sector creates almost three times as many jobs than as investing in fossil-fuel companies, they say, citing a 2017 journal study. Given how hard Covid-19 has hit investments in renewables—which in the second quarter came to less than half what they were during the same period in 2019, according to BloombergNEF — the authors call for extensions to existing tax credits for clean-energy investment and production. They also would like to see those tax credits converted into cash grants, which would reduce the need for small businesses to go looking for deep-pocketed investors with large tax liabilities in order to stay afloat.
On energy, the new paper identifies two existing relief programs it says could deliver aid that both generates new jobs and cuts bills for those in financial distress. The Low Income Home Energy Assistance Program, which helps households near the poverty threshold pay utility bills, has been underfunded for years, the authors write. More assistance could free workers from the constraints of debt and poverty, allowing them to consume and invest in new ways. Similarly, increased funding to the Energy Department’s Weatherization Assistance Program would bring both economic relief and lower greenhouse gas emissions.
States are responsible for 72% of U.S. infrastructure spending, a burden the federal government is well-positioned to share, according to a 2019 policy paper cited by the authors. Water infrastructure alone faces a $1.3 trillion shortfall, and without federal assistance, “it will be impossible for localities to close this gap,” they say. Dams, levees, and coastal protections must be viewed through the prism of climate resilience. Mass transit, meanwhile, received $25 billion from relief bills passed earlier this year, short of the $32 billion needed, according to the report.
As the coronavirus crisis has dragged on, Congress has struggled to draft another round of stimulus legislation—initially expected over the summer, now not looked for until well after the election, if ever. Washington’s political divisions are only part of the challenge. Problems requiring multidisciplinary solutions can create friction within the legislature itself.
“The way that Congress is structured is very siloed,” Gunn-Wright explained. Congressional committees weren’t designed to advance emergency legislation that provides economic relief, infrastructure investment, inequality mitigation, fiscal incentives, and climate change protections. “That is really difficult,” she said.
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