Tag Archives: France

Build back better: is now the time for Green New Deals? – Part 2

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A window of opportunity

In policymaking, there is a concept known as the “Overton Window”, which describes the range of policies that politicians can propose without being considered too extreme by the population at large. This window of opportunity can be shifted and can allow for policies that in the past may have been considered unthinkable and radical to become mainstream and even sensible.

The impact of Covid-19 and the public health measures that have been required to suppress the virus, have undoubtedly resulted in a shift in the “Overton Window”. Policy interventions, such as the Job Retention Scheme and national lockdown, which involved massive amounts of government spending and restrictions to every aspect of our day-to-day lives, suddenly became normal and were largely approved of by the public.

In these circumstances, the concept of the Green New Deal, a policy package which involves large amounts of government spending, designed to create green jobs, develop green infrastructure and modernise the economy, may no longer be such an unfeasible idea.

Build back better: a green recovery

The economic impact of Covid-19 is expected to result in a 5.2% contraction of global GDP, amounting to the deepest global depression since 1945. In order to recover from this contraction, governments are formulating unprecedentedly large economic stimulus packages, designed to mitigate the economic and social damage created by the pandemic. Already there are numerous examples of governments utilising aspects of the Green New Deal within their economic recovery plans.

European Union

Next Generation EU – A European Green Deal

Prior to the Coronavirus pandemic, the European Commission was already working on creating a European Green Deal, which would support the EU transition to climate neutrality by 2050. After the onset of the pandemic, the European Commission moved to position the Green Deal as a key pillar of the EU’s €750 billion recovery package, known as Next Generation EU. 25% of the recovery package has been dedicated to funding climate action, whilst the entire package features a commitment that any money spent as part of the EU’s economic recovery must “do no harm” to the EU’s climate neutrality goal. The recovery package includes policies that are similar in nature to other Green Deals, including:

  • a €40 billion ‘Just Transition Fund’, to alleviate the socio-economic impacts of the green transition and diversify economic activity;
  • a €91 billion a year fund to improve home energy efficiency and develop low carbon heating;
  • the introduction of an EU-wide border tax on carbon-intensive industrial imports with the potential to raise €14 billion.

French Government

France Relaunch

The French government’s recently announced €100 billion stimulus package, includes a €30 billion package of measures designed to aid France’s transition to carbon neutrality. The measures set out within the package incorporate core elements from Green New Deals, such as developing cleaner forms of transport and improving the energy efficiency of buildings. The package includes the following green measures:

  • a €11 billion investment in developing and encouraging the use of green transport methods, nearly €5 billion of which will be used to upgrade rail lines to encourage freight traffic from road to rail;
  • a €6 billion investment to help improve the energy efficiency of homes and other buildings;
  • A €2 billion investment to help develop the hydrogen sector.

Scottish Government

Protecting Scotland, Renewing Scotland

Within this year’s Scottish Government Programme, it is evident from the first page that it views the need for economic recovery as an opportunity to create a  “fairer, greener and wealthier country”. The programme explicitly describes the measures contained as “the next tranche of our Green New Deal” and borrows extensively from existing Green New Deals, with policies including:

  • a £100 million green Job Creation Fund;
  • a £1.6 billion investment to decarbonise the heating of homes and other buildings;
  • a £62 million Energy Transition Fund to support businesses in the oil, gas and energy sectors over the next five years to grow and diversify;
  • capitalisation of the Scottish National Investment Bank with £2 billion over ten years, with a primary mission to support the transition to net zero emissions.

UK Government

A Plan for Jobs

A key element of the UK Government’s plans to support and develop the labour market is the creation of green jobs, through investment in infrastructure, decarbonisation and maintenance projects. Improving the energy efficiency of buildings is a principle which is at the core of the Green New Deal. The Plan for Jobs includes similar proposals, such as:

  • a £2 billion Green Homes Grant scheme that will provide homeowners and landlords with vouchers to spend on improving the energy efficiency of homes across the UK;
  • a £1 billion Public Sector Decarbonisation Scheme that will offer grants to public sector bodies, including schools and hospitals, to fund both energy efficiency and low carbon heat upgrades;
  • a £40 million Green Jobs Challenge Fund for environmental charities and public authorities to create and protect 5,000 jobs in England.

Final thoughts

The concept of the Green New Deal is one that appears to evolve and shift as time goes on. This is unfortunately to be expected as time runs out for governments to take meaningful action to avert rising global temperatures. The transition to carbon neutrality is one that will undoubtedly result in massive changes to almost every aspect of our day-to-day lives, and therefore it is not surprising that the journey to reach this point may require bold and unprecedented action.

However, prior to the Coronavirus pandemic, it would have been unimaginable to consider the levels of spending and intervention that governments would be required to take in order to implement a Green New Deal. The shift to carbon neutrality involves a complete reimagining of the economy and requires a great deal of public support, in particular when the energy transition may threaten the jobs of those who work in carbon-intensive industries.

In a post-Covid era, the concept of governments spending huge sums of money and making unprecedented interventions is now our everyday reality. The economic consequences of the pandemic will require an extraordinary response to ensure that its legacy is not one of increasing levels of unemployment, inequality and stagnation. In this new world, the ambition and wide-ranging nature of the Green New Deal may no longer be seen as unfeasible. In fact, as can be seen in the UK and Europe, governments are already looking to implement various elements of the Green New Deal as part of their economic recovery packages. Perhaps the Green New Deal is about to have its time.

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Part one of this blog post was published on Monday 14 September.

Read some of our other blogs on climate change and the impacts of Covid-19:

The economic impacts of the coronavirus outbreak: what the experts are saying

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While the coronavirus outbreak is first and foremost a public health emergency, the economic damage caused by the pandemic is also a huge concern. In recent weeks, think tanks and economists have been offering their thoughts on just how badly they believe the economy will be affected by Covid-19, and how long it might take to recover.

With each passing week it’s emerging that the economic impact of the coronavirus could be more severe than first thought. The International Monetary Fund (IMF) has warned that the shutdown of economic activity in the world’s major economies is likely to trigger a far more painful recession than the one following the financial crisis of 2008. The IMF now believes that the world is facing the worst economic downturn since the Great Depression of the 1930s.

In the UK, an equally gloomy prognosis has come from the Office for Budget Responsibility (OBR), the government’s fiscal watchdog. Its stark assessment of the possible economic impact of Covid-19 indicates that the UK economy could shrink by 35% and unemployment could rise to more than two million.

The regional picture

The economic impact of coronavirus is varying significantly across the country. Research by the Centre for Progressive Policy (CPP) has revealed that the decline in economic output is estimated to reach almost 50% in parts of the Midlands and the North West in the second quarter of this year. In terms of decline in Gross Value Added (GVA), Pendle in the North West is estimated to be the hardest hit local authority in the UK, followed closely by South Derbyshire and Corby in the East Midlands.

In Scotland, since the coronavirus outbreak began, the University of Strathclyde’s Fraser of Allander Institute (FAI) has been publishing regular updates about how business is being affected.

The FAI’s most recent survey of Scottish businesses  finds that, while all sectors of the Scottish economy have been severely affected by the crisis in terms of staffing levels, the accommodation and food services sector (which includes hotels, bars and restaurants) has experienced the harshest impacts, with 77% of businesses reducing staff numbers. In addition, 85% of businesses expect growth in the Scottish economy to be weak or very weak over the next 12 months.

On a more positive note, the FAI survey found that more than 95% of businesses which are planning to use the UK government’s  Coronavirus Job Retention Scheme believe it will be ‘very effective/effective’ in supporting their survival during the pandemic.

Business and employment support

The Job Retention Scheme is one of a series of measures introduced by the UK government aiming to limit the impact of the coronavirus, and ensure much of the economy is able to recover when the health crisis is over. While these actions have been widely welcomed, there have been calls for the UK to learn from more innovative measures adopted by other governments.

A report by the Policy Exchange think tank has highlighted Denmark’s wage subsidy, which is differently calibrated to the Job Retention scheme in the UK. While the Danish government is covering 75% of the salaries of employees paid on a monthly basis who would otherwise have been fired, for hourly workers the government will cover 90% of their wages, up to £3,162 per month. The Policy Exchange report notes that this assumes that workers paid by the hour won’t have the savings and support networks that generally better off salaried workers are likely to have.

Household challenges

The bigger economic picture is bad enough. But the real pain of an economic recession will be felt much closer to home. For individual households, social distancing measures aiming to contain the spread of coronavirus are already having significant impacts on spending habits. Research by the Institute of Fiscal Studies (IFS) has highlighted how these changes may be affecting people on different incomes.

The IFS suggests that richer households will be more resilient to falls in income since a considerable proportion of their spending goes on things that are currently not possible, such as eating out and holidays. But because lower-income households spend a higher share of their income on necessities, such as rent and food, the IFS suggests that they will be less resilient to any fall in income.

Exiting lockdown

In recent days, governments in France and Germany have set out plans for easing their lockdown restrictions, while Austria and Italy have already allowed some shops to open.  But the UK government has extended its lockdown to the beginning of May, and has not announced a clear exit strategy.

The uncertainty surrounding the trajectory of the coronavirus makes it exceptionally difficult to see when things might return to normal. But some analysts are becoming concerned about the harm that a prolonged lockdown might do.  A discussion paper published at the beginning of April highlighted some of these dangers:

“A long lockdown will wipe out large swathes of the economy. There will be a negative impact both financially and mentally on too many people. Already the lockdown has seen a surge in domestic violence. How to end the lockdown is key to helping restart the economy.”

The authors of the paper have put forward a strategy for ending the lockdown, suggesting that a phased traffic light approach (red, amber, green) would give everyone a clear sense of direction and address the economic, social and quality of life challenges posed by the lockdown.

After the virus

There is no clear agreement among economists on how the economy might fare once the health emergency has passed. Some economists forecast a sharp recovery, others suggest it will take two or more quarters, while still others forecast an initial boost in activity followed by another dip when the effects of unemployment and corporate bankruptcies start to filter through.

But there is a growing sense that the pandemic will have a fundamental impact on the economic and financial order. And in the UK, Paul Johnson, director of the IFS,  has suggested there will be an economic reckoning:

 “We will need a complete reappraisal of economic policy once the current economic dislocation is behind us. Tough decisions will have to be made which are likely to involve tax rises and higher debt for some time to come. The only other alternative would be another period of austerity on the spending side. That looks unlikely.”

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Test drives: around the world, driverless buses are taking to the streets

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Navya Driverless Shuttle Bus, Lyon. Photo: Navya-Technology.com

They may have a top speed of under 50 kilometres per hour, but driverless buses are moving into the fast lane of transport innovation. In recent months, cities around the world have been trialling automated bus services:

  • Driverless buses constructed by French technology firm Navya have started appearing on the roads of France, Switzerland, and Australia.
  • The “WePod”, developed by Delft Technical University has been carrying passengers to, from and around the campus of Wageningen University & Research centre in the Netherlands.

Auto-mobility

While Google have been grabbing most of the headlines to do with driverless vehicles, the French technology firm of Navya has been designing and producing autonomous cars since 2014. In October 2015, Navya launched its ARMA bus.

The ARMA does not require any driver or specific infrastructure, and has onboard sensors to avoid collisions. The electrically-powered vehicle is also environmentally friendly; its batteries can last from 5 to 13 hours, depending on the configuration and the traffic conditions.

The ARMA buses are not designed to replace mass-transit networks. With a capacity of no more than 15 passengers and speeds of no greater than 50 km per hour, the ARMA buses are designed to cover short distances, following distinct routes that avoid heavy traffic. However, they could prove ideal for locations such as airports and conference centres. Since the beginning of September, the ARMA buses have been carrying passengers on ten-minute journeys through the futuristic Confluence district of Lyon. And Navya shuttle buses are also ferrying workers and visitors around the EDF power plant in Civaux, The driverless service replaced a diesel bus, cutting waiting time down from 15 to 5 minutes. EDF estimates the time savings could result in as much as 3 million euros’ worth of extra productivity.

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Navya Driverless Shuttle Bus,EDF, Civaux. Photo: Navya-Technology.com

Going Dutch

Driverless buses called “WePods” have taken to the public roads as part of a pilot project in the Dutch province of Gelderland.

The project managers see numerous possibilities for the autonomous vehicles, such as on-demand pick-up services, filling public transport gaps in rural areas and provision of garbage collections. Ultimately, driverless buses could help solve urban parking problems and increase road capacity. And because around 70% of public transport costs are due to personnel costs, the WEpods could also save transport authorities money.

Addressing concerns

Naturally, concerns have been raised about the safety of driverless vehicles. The truth is that no type of transport is 100% safe. Even though driverless vehicles have sensors, cameras, radar and lasers to prevent collisions, accidents caused by human-driven vehicles will still happen.

However, the designers of driverless vehicles are adopting a safety-first culture.  In many of the vehicles, data is stored in the equivalent of an aircraft’s “black box”, enabling lessons to be learned from incidents taking place during the journey.

Fast forward

The trend towards driverless buses shows no sign of slowing down. In 2015, a self-driving bus took passengers on a 20-mile journey through the Chinese city of Zhengzhou. In Kista, north-west of Stockholm, members of the public were invited to test-ride driverless buses as part of the town’s April 2016 mobility week. And in August 2016, trials of automated buses took place in the Finnish capital of Helsinki.

With regard to automated transport, it seems that the stuff of science fiction is fast becoming a matter of fact.

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