While early responses to the COVID-19 pandemic were focused on rescue efforts, governments are now transitioning into economic recovery efforts. The five Asian countries analyzed in this report — India, Indonesia, the Philippines, Singapore, and South Korea —have together announced a total of USD 884 billion in COVID-19 recovery stimulus packages since the outbreak of the pandemic in February 2020. But how effective will those public investments be in producing long-term, sustainable growth?
This study, jointly produced by Climate Policy Initiative and Vivid Economics maps the ‘greenness’ of these fiscal stimulus measures and their contribution towards country-level climate objectives. Compared to business-as-usual stimulus measures, green stimulus measures have been proven to provide both short-term economic gains and build national wealth in the long-term. Green recovery measures, such as investment in renewable energy, low emission transport, energy efficiency, and nature-based mitigation and adaptation solutions provide higher employment intensity, along with other financial returns and wider social benefits, than policies that seek to prop up aging, more polluting means of production.
Growth models that rely on the depletion of natural capital and accelerate the climate crisis are not sustainable, because emissions-heavy and environmentally-harmful business models are now facing the risk of depleting raw materials, less demand, and ultimately stranding financial assets. Restoring nature and biodiversity, aggressively transitioning into renewable energy, and investments in sustainable infrastructure are job-intensive activities that can help regions hard-hit by the economic crisis, while also contributing to each country’s climate goals. The Coalition of Finance Ministers for Climate Action emphasized that following immediate action to manage the crisis, policymakers need to design and implement recovery strategies that support sustainable growth over the medium and long term.
The analysis presented in this study builds on the Greenness of Stimulus Index (GSI) developed by Vivid Economics to assess the sustainability implications of fiscal stimulus packages across the five Asian countries included in this study.