Green investments likely to boost economic growth

New Delhi: A research by the University of Oxford published on Tuesday showed efforts to rebuild economies after the devastation of coronavirus would be strengthened by including green measures such as clean energy infrastructure investment.

This first-of-its-kind study critically evaluates the benefits of tackling climate change along with the post-coronavirus economic recovery. A team of internationally-recognised experts, including Nobel Prize winner Joseph Stiglitz and well-known climate economist Nicholas Stern, came together to assess the economic and climate impact of taking a green route out of the crisis. They catalogued more than 700 stimulus policies into 25 broad groups, and conducted a global survey of 231 experts from 53 countries, including senior officials from finance ministries and central banks.

Drawing on this survey as well as learnings from the 2008 financial crisis, the economists found that green projects create more jobs, deliver higher short-term returns per dollar spend and lead to increased long-term cost savings, by comparison with traditional fiscal stimulus.

"The Covid-19 initiated emissions reduction could be short-lived," said Cameron Hepburn, lead author of the report and Director of the Smith School of Enterprise and Environment, University of Oxford. "But this report shows we can choose to build back better, keeping many of the recent improvements we've seen in cleaner air, returning nature and reduced greenhouse gas emissions."

The study focused on the reduction of greenhouse gas emission as the key environmentally-beneficial criteria. The paper, to be published in the Oxford Review of Economic Policy, observes desirable policies have a large return on investment, can be enacted quickly and have a strongly positive impact on climate. Examples include investment in renewable energy production, such as wind or solar. As previous research has shown, in the short term, clean energy infrastructure construction is particularly labour intensive, creating twice as many jobs per dollar as fossil fuel investments, as well as being less susceptible to off-shoring.