A stimulating stimulus?
The new administration is up to its eyeballs trying to pull off an economic stimulus package that will genuinely stimulate the economy while also (to their credit) meeting another critical need - to jumpstart the transition to a green energy system. I don't envy them that job, not for one second - particularly because at the same time, officials charged with overseeing the bank bailouts (otherwise known as the Troubled Assets Relief Program) are struggling to figure out how to hold the banks accountable for spending that money in a way that has broad benefits. It would be a crying shame if all the bailout money used by the banks went to finance the old carbon intensive fossil fuel infrastructure, thereby undermining the laudable intentions enshrined in the economic stimulus package. A fact that is apparently not lost on HSBC for one (bank). Bill Becker, writing on Climate Progress
On January 19, HSBC Global Research issued an analysis of the economic stimulus packages passed or pending in 15 nations, including the United States. It found that these countries plan to invest more than $3 trillion to stimulate their economies over the next decade. Only about 14% of that amount will be invested in green technologies - defined by HSBC as low carbon power, energy efficiency, water treatment and pollution control.
The amount of green investment ranges from 0% in Poland (a country stubbornly dependent on coal) to 69% in South Korea. China plans to dedicate 34% of its stimulus package to green initiatives; the stimulus package approved by the European Union invests 14%. Overall, HSBC calculates, about $432 billion is earmarked for green investments among the 15 nations it studied, with about 50% of that amount expected to be invested in 2009.
The United States? By HSBC’s calculation, 16% of the proposed $825 billion stimulus package targets green investments. One of the key questions Congress must ask, and answer quickly, is whether that’s sufficient stimulus for a new energy economy and sufficient evidence of U.S. leadership. Put another way: How much of our children’s money will we spend on life-support for the old carbon economy and how much will we invest to build the new one?
Stimulating a green economy will require more than a disbursement of the one-off stimulus package - it will require a long-term redirecting of public and private capital into renewables and energy efficiency.