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.
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.
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.
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.
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.
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:
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