One of the big questions facing policymakers is whether to push ahead with their climate and environmental goals or to relax them during the global health pandemic. The Trump administration is choosing the latter, arguing that the regulatory pressures on business are, well, bad for business.
The global community is in pain. But a group of prominent scholars has come to a different conclusion than that of the White House. The Oxford Smith School of Enterprise and the Environment has analyzed the issue and concluded that investment in green technologies is the most efficient way to nurse an economy back to health. Renewable energy projects and modern electric grids can deliver the strongest medicine, it says, noting that those efforts have a long-term payback.
“Green fiscal recovery packages can act to decouple economic growth from greenhouse gas emissions and reduce existing welfare inequalities that will be exacerbated by the pandemic in the short-term and climate change in the long-term,” says Nobel laureate Joseph Stiglitz, British climate expert Lord Nicholas Stern, Cameron Hepburn, Brian O’Callaghan, Dimitri Zenghelis, who authored the just-released study by Oxford.
They looked at previous economic recoveries and interviewed central bankers and senior economists from around the world.
How will this message resonate not just with Republican lawmakers on Capitol Hill but also with investor groups and voters generally? Congress has enacted nearly $3 trillion in stimulus bills so far, with the vast majority going to pay for families, small businesses and to help ailing industries. More bills are planned. The one area where compromise is possible is giving some assistance to oil and gas drillers in exchange for extending tax breaks to wind and solar developers as well as electric vehicle buyers.
But the reality is that the two parties have returned to their respective corners. The House Republicans on the Energy and Commerce Committee tweeted that “Americans wants relief and results — not radicalism.” The Democrats, meanwhile, point to the Obama administration’s success with the New Energy Economy and how investments in such things as wind and solar, microgrids and battery storage have advanced energy and environmentalism — moves that were once labeled as radical but today they have become mainstream.
“Ultimately, in their recovery plans, governments should prioritize sustainability and equity and accelerate the transition to a net-zero emission economy to mitigate climate risks, create new jobs and catalyze the sustainable deployment of private capital,” says a group of shareholder activists groups including CERES, Principles for Responsible Investment and Carbon Disclosure Project. “Recovery plans that exacerbate climate change would expose investors and national economies …”
Among the energy companies that support their mission: Edison International EIX, Exelon Corp. EXC and National Grid NGG.
The Pew Research Center finds that two-thirds of U.S. adults do not think that the American government is doing enough to combat climate change. Those findings are consistent with analyses that it did before the coronavirus. But its study also shows a sharp divide between the parties over these issues. The one caveat is that Republican millennials and women favor stronger environmental positions.
That may explain why the Trump administration has tried to undo almost all of the environmental policies set by the Obama administration: fuel efficiency standards, mercury rules and carbon limitations, to name three. In response to the pandemic, the U.S. Environmental Protection Agency said that it is suspending regulatory oversight — a move now being litigated.
The White House believes in financial relief first. But economic recovery and environmental activism are not mutually exclusive. The Oxford Smith School of Enterprise and the Environment study underscores that. Furthermore, using the coronavirus as an excuse to avoid energy and environmental improvements is misguided: not only is it is a hard sell in a general election but also a Harvard University study finds that air pollution and COVID-19 death rates are linked — that a small increase in particulate matter leads a large increase in those deaths.
Moreover, clean energy has been an American success story: employment in the sector has grown by 10.4% since 2015, according to Clean Jobs America 2020 — a report sponsored by E2 and researched by BW Research. In 2019, clean energy made up 40% of employment in the energy industry and 2.5% of the nation’s overall employment.
The cumulative effect is changing minds — on both sides of the aisle. RepublicEn.org, and ConservAmerica are two Republican groups that argue that economic growth and environmental stewardship go hand-in-hand.
“The only way to create long-term sustainable change is if all parties come to the table,” adds Michael Cain, president and co-founder of Dallas-based EarthxFilm, in a talk with this writer. “We create a centrist platform to enter an awkward conversation to get positive results for the planet. It is a safe space and we want everyone to feel their voices will be heard.”
During stressful times, the natural reflex is to hunker down. But if the Great Recession has taught us anything, the time to take bold action is during economic difficulties: it is good for business and it can be good politics as well. The same questions are now before U.S. lawmakers and they will ultimately come before the American people.
forbes.com, 12 May 2020