The World's Green Stimulus and the Future of the Green Economy

Every $1 billion invested in energy efficiency and clean energy in the United States could eventually generate energy savings of $450 million per year. Cuts in annual greenhouse gas emissions could be more than 500,000 tons by 2020 leading to an employment boost of around 30,000 job a year. This employment boost  represents a 20% increase in jobs over traditional fiscal stimulus.

These are among the many interesting findings revealed in the new book, A Global Green New Deal: Rethinking the Economic Recovery, by Edward Barbier. The book details the global initiatives of economic stimulus packages of the world's governments on developing green economies. It is published by the United Nations Environment Programme (UNEP) and Cambridge University Press. Barbier is an economic consultant for the UNEP's Global Green New Deal/Green Economy Initiative and a leading economist from the University of Wyoming. More interesting findings of the book:

China and South Korea are leading the way on the future of the green economy. China is a known world leader of green businesses. It produces the most solar panels, wind turbines, and solar heaters in the world, which is valued at $17 billion. Those industries employ one million people (still just 0.1% of the working population). Of China's stimulus package, one third is being invested into high speed rail (3% China GDP), a measure that will reduce the focus on automobiles and reduce the impact of automobiles' already large portion of global carbon emissions. Nearby, South Korea has focused also on low emissions vehicles. South Korea's stimulus package will see 95% of funds to go clean technology and environmental sectors (3% of South Korea's GDP). Its proposed five-year green growth investment plan (as of July 2009) will spend $60 billion to cut carbon dependency as well as boosting economic growth by adding 1.8 million jobs by 2020.

In contrast, the United States and the European Union seem to be stumbling forward with their green economies and efforts. Certainly, they are allowing others to take the leadership roles, to take initiative, and to drive forward climate change mitigation efforts. For example, the much praised US stimulus package of 2009: The American Recovery and Investment Act, allocates 12% of the package for green a green economy (0.7% of US GDP). The stimulus package of the European Union allocated 50% to green projects (about $23 billion) but still only represented 0.2% of EU GDP.

"With China and South Korea leading the way in environmental investments, other G20 countries must unite to promote a sustainable global economic recovery both through fiscal stimulus and long-term policy implementation... Indeed without a long term vision on how to further catalyze and embed the environment within the economy, there is a real danger that many of the G20's green stimuli will wither and simply go to waste," - Barbier. Recalling the epochal Stern Review, in 2006 it recommended that world governments spend 1% of GDP on energy efficiency and clean energy projects to hold climate change to about 5 degrees Celsius, costs rise if we hesitate.

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