EU €750 billion Recovery Plan announced to mixed reaction

In a speech before the European Parliament on May 27, European Commission President Ursula von der Leyen announced an updated seven-year €1 trillion budget proposal and a €750 billion recovery plan for the European Union, focused on a green and digital economy.  Europe’s moment: Repair and Prepare for the next generation describes the major structure of the plan,  accompanied by  a 5-page Fact Sheet  which highlights “Next Generation EU”, the new recovery instrument.

The EU recovery strategy affirms a commitment to a European Green Deal and promises:

  • “A massive renovation wave of our buildings and infrastructure and a more circular economy, bringing local jobs;
  • Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
  • Cleaner transport and logistics, including the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in our cities and regions;
  • Strengthening the Just Transition Fund to support re-skilling, helping businesses create new economic opportunities.
  • Also, recovery goals include a short-term European Unemployment Reinsurance Scheme (SURE) will provide €100 billion to support workers and businesses;
  • A Skills Agenda for Europe and a Digital Education Action Plan will ensure digital skills for all EU citizens;
  • Fair minimum wages and binding pay transparency measures will help vulnerable workers, particularly women”;

Some European reactions to the proposals are compiled in the summary article “‘Do no harm’: EU recovery fund has green strings attached ” in Euractiv . More negative views come from  Climate Action Network Europe, which  calls the proposals “greenwashing” and in a more detailed press release  states:  “Despite repeated commitments by the European Commission to make the European Green Deal the blueprint of the recovery, the proposal still allows for money to be spent on supporting fossil fuels and is lifting climate spending targets in regional development funding, while the climate emergency would need a rapid phase-out of these polluting fuels and strong climate earmarking.”  

Friends of the Earth Europe had earlier released their own proposals for a European recovery plan, here ,  and reacted to the EU announcement on May 27 with  EU Recovery Package falls short of Building Back Better – which states:

“today’s package would not prevent investments in new fossil fuel infrastructure nor put conditions on bailing out polluting industries like airlines – leaving a gaping hole in achieving the aims of the European Green Deal. Nor are there conditions related to compliance with human rights, not paying out dividends, or buy-back of shares for companies that receive funding. …… The plan gives significant political support to the development of hydrogen, without stipulating that this comes from renewable electricity alone. This could open the door to more climate-damaging fossil fuels in our energy system. The Commission will direct welcome financial support to renovating buildings, creating jobs and cutting carbon; this will need to be backed by legislation to reduce energy poverty and ensure every home in Europe meets minimum efficiency standards. Friends of the Earth welcomes an increase in funds for the Just Transition Fund, and the focus on jobs and skills.”

In  “’Defining moment’ as EU executive pushes for €500bn in grants (May 27) The Guardian summarizes the proposals and focuses on the political fight ahead amongst EU members: For example, Austria, Denmark, the Netherlands and Sweden, (a group called the “frugal four”), who want recovery funding to take the form of loans, not grants.  The potential financial and political wrangling is also the focus of the New York Times article, ” A €750 Billion Virus Recovery Plan Thrusts Europe Into a New Frontier” .  The Energy Mix  reported on North American reaction to a version of the EU proposals leaked by Bloomberg, in “EU’S massive green recovery plan includes 15-GW renewables tender, support for green hydrogen” (May 24).

Proposals for Canada’s Covid-19 recovery promised from a Task Force for a Resilient Recovery

A press release on May 19 announced the launch of a Task Force for a Resilient Recovery,  funded by private foundations and led by two research organizations: the Smart Prosperity Institute and the International Institute for Sustainable Development .  The Task Force promises to develop “actionable recommendations on how governments can help get Canadians back to work while also building a low-carbon and resilient economy” and will release their final report at the end of July 2020.

The Resilient Recovery website is available in English and French.  The websites already include the proposals of the two research organizations:  from the Smart Prosperity Institute – a 25-page “manual”   which provides a Framework  based on nine criteria, clustered in three categories: 1.  does the measure stimulate timely, lasting economic benefits and jobs? 2.  does the measure help the environment and support clean competitiveness? 3. is the measure equitable, implementable and feasible?

From the International Institute for Sustainable Development , a discussion which endorses the May 4  report from the Smith School of Enterprise and the Environment at Oxford University,  Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?. 

Who is involved in this Task Force? 

Members are listed at the website . In addition to Stewart Elgie of the Smart Prosperity Institute and Richard Florizone of the IISD,  there are fourteen, including Elizabeth Beale, former President and CEO of the Atlantic Provinces Economic Council; Barbara Zvan, former Chief Risk & Strategy Officer for the Ontario Teachers’ Pension Plan; Don Forgeron, President and CEO of the Insurance Board of Canada;  Bruce Lourie, President, Ivey Foundation; James Meadowcroft, Professor, Carleton University; and Merran Smith, Executive Director, Clean Energy Canada.  The initiative is funded by the Jarislowsky Foundation, Ivey Foundation,  McConnell Foundation, Schad Foundation, and the Echo Foundation.

Notably, this Task Force is unrelated to the May 11 statement  which appeared in The Hill (May 11) from Canadian Labour Congress President Hassan Yussuff and Chamber of Commerce president Perrin Beatty. Describing their co-operative efforts in the Covid-19 crisis, they continue:  “we are calling on the federal government to strike a task force to develop recommendations on how to reboot the economy. The sheer scale of these decisions requires a variety of perspectives, not least of which will be accommodating the varied needs of the vastly diverse sectors. When it comes time for recovery, we will need broad engagement with governments, labour, businesses both large and small across sectors, public health experts, Indigenous groups, non-profits and academics.”

Disaster capitalism in Alberta – oil and gas producers exempted from emissions reporting, testing for methane leaks

Although the Green Party of Canada has stirred up the hornet’s nest of oil politics in Canada by the “Oil is Dead” statement in May,  Alberta Premier Jason Kenney  continues to reject that idea, in word and deed.  Since the onset of Covid-19,  Alberta environmental rollbacks have been described as a textbook case of “disaster capitalism” and the government has been accused of “out-Trumping Trump . In April, the Alberta government made amendments to the Environmental Protection and Enhancement Act, Water Act, Public Lands Act and the newly implemented Technology Innovation and Emissions Regulations  – providing exemptions to oil and gas operators from reporting air quality emissions from smokestacks, tailings ponds, transportation and dust until Dec. 31, 2020.  Amendments to the Oil and Gas Conservation Act and the Pipeline Act could allow the Orphan Well Association to use federal and provincial emergency relief funds to  produce and sell oil from abandoned wells and operate abandoned pipelines.  Professor Saun Fluker summarizes the changes in a University of Calgary Faculty of Law blog post, “COVID-19 and the Suspension of Energy Reporting and Well Suspension Requirements in Alberta” (April 10). A broader analysis by two academics from the University of Guelph appears in “Disaster capitalism: Coronavirus crisis brings bailouts, tax breaks and lax environmental rules to oilsands”  (April 29, The Conversation), and Sharon Riley has written an  in-depth article , “8 environmental responsibilities Alberta can skip”  (The Narwhal, April 27).  Randy Christensen of Ecojustice has also written a brief article, “Warning: disaster capitalism”, which argues that “the governments of Alberta and Ontario have now made moves that are more far-reaching and potentially riskier”  than the Trump EPA roll-backs announced in March.  The reference to Ontario is based on the Ontario government’s April 1 regulation which temporarily suspends public consultation under Ontario’s Environmental Bill of Rights. And Newfoundland could also be considered for the list, according to “Newfoundland offshore drilling: a case of bending environmental impact rules” (National Observer, April 3) .

On May 6, the Edmonton Journal  and the Toronto Star  reported further exemptions by the Alberta government:  from the Star:   “A decision by the Alberta Energy Regulator in May, means that Imperial Oil, Suncor, Syncrude and Canadian Natural Resources Ltd. don’t have to perform much of the testing and monitoring originally required in their licences – including monitoring of  most ground and surface water; most wildlife and bird monitoring, and a reduction of air quality monitoring – with the suspension of testing for methane leaks.”    The Star article argues that many of the changes correspond closely to the demands made  by the Canadian Association of Petroleum Producers (CAPP) in March in a 13-page letter sent to federal ministers: Covid-19 Crisis Response – Actions Required regarding federal Policy and  Regulations .  Keith Stewart of Greenpeace Canada is quoted in The Star,  saying he “isn’t aware of any other jurisdiction in the world that has gone as far as Alberta to roll back environmental protections during the pandemic, including the United States under President Donald Trump.”

On May 7, Vice  published “What the hell is going on in Alberta?”, with this opening statement: “It’s safe to say Alberta is in crisis.”

B.C.’s Covid-19 economic recovery plans, and safety, WCB coverage for workers

“What Kind of Recovery Economy Is BC Planning to Build?” appeared in The Tyee (May 6)  discussing the British Columbia Economic Recovery Task Force, appointed in early April.  The article points out that the 19-member Task Force lacks any representation from environmental advocacy groups – although Laird Cronk, president of the B.C. Federation of Labour was appointed, along with the leaders of major business and community organizations, in addition to the Premier, cabinet ministers, and senior BC emerging economies taks forcecivil servants. The province also consults with their Climate Solutions Advisory Council, and on May 11, released the Final Report of the  Emerging Economies Task Force, appointed in 2018.  The press release affirms that it “will also be a valuable resource to help inform the province’s COVID-19 pandemic economic recovery”, despite the fact that it was submitted to the government in March 2020, and so pre-dates the Covid-19 crisis.  One of its five strategic priorities  of the Emerging Economies report is titled “Leveraging B.C.’s Green Economy”.

Worker safety as the economy re-opens

On May 6, Premier Horgan announced  Phase 2 , a cautious re-opening the economy. Responsibility for the safe opening and operation of workplaces is delegated to WorkSafe B.C., whose media release states: “As employers prepare to resume operations, they will need to have a safety plan in place that assesses the risk of COVID-19 transmission in their workplace, and develops measures to reduce these risks. This planning process must involve workers as much as possible to ensure their concerns are heard and addressed — this includes frontline workers, supervisors, Joint Health and Safety Committees, and/or worker representatives.” WorkSafeB.C. will issue industry-specific guidance and promises consultation with workers and employers; their general resources for Covid-19 return to work is here

The B.C. Federation of Labour  reacted on May 11 to the announcement that the Workers Compensation Board will add COVID-19 to Schedule 1 of the Workers Compensation Act, thereby granting “presumptive coverage” and expediting workers’ claims.  According to the B.C. Fed, there were  317 COVID-19-related WCB claims in B.C. as of April 29. The B.C. Fed had advocated for the enhanced WCB protection, as well as for the enhanced sick leave protections and $1,000 tax-free provincial Emergency Benefit for Workers, announced in March.

Related Note: On May 7, the Vancouver Just Recovery Coalition  released a statement signed by community, advocacy groups and unions, stating:   “As our federal, provincial and municipal governments begin to strategize on their post-COVID recovery and rebuilding strategies, we need to prioritize those most impacted, ensuring that our economic recovery lessens existing inequalities, respects Indigenous rights, and tackles the climate emergency. The pre-COVID status quo was failing too many people. ”

 

U.K. proposals for a green recovery after Covid-19

A widely-reported study by economists at Oxford University seeks to identify fiscal policies which will best lead the world to post-Covid economic recovery, while also leading to a net-zero economy.  Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?  was published on May 4 as a Working Paper by the Smith School of Enterprise and the Environment at Oxford University, (forthcoming as an article in the Oxford Review of Economic Policy). Lead authors Cameron Hepburn and Brian O’Callaghan are joined by economic heavy-weights such as Nicholas Stern and Joseph Stiglitz, among others. The paper states: “The climate emergency is like the COVID-19 emergency, just in slow motion and much graver. Both involve market failures, externalities, international cooperation, complex science, questions of system resilience, political leadership, and action that hinges on public support. Decisive state interventions are also required to stabilise the climate, by tipping energy and industrial systems towards newer, cleaner, and ultimately cheaper modes of production that become impossible to outcompete.”

The authors identified over 700 fiscal stimulus policies used since the 2008 financial crisis – both climate-friendly and not – and distilled these down to 25 archetypal policies. They then  surveyed the reactions of 231 senior economists and financial experts from over 50 countries to these archetypal policies, and identified the  five “with high potential on both economic multiplier and climate impact metrics: clean physical infrastructure, building efficiency retrofits, investment in education and training, natural capital investment, and clean R&D. In lower- and middle income countries (LMICs) rural support spending is of particular value while clean R&D is less important.”

An informal summary of this report, written by the two lead authors, appears as Leading economists: Green coronavirus recovery also better for economy” at Carbon Brief (May 5). Other coverage includes “Green Stimulus can repair global economy and climate, study says”  (The Guardian, May 5);

Also on May 4, the Smith School released a companion Working Paper  “A net-zero emissions economic recovery from COVID-19”  which discusses the differences between the 2008 financial crisis and the economic damage of the  Covid-19 pandemic. It  builds on the paper by Hepburn et al., and makes 10 specific recommendations for a U.K. green stimulus package, with strategies clustered around:

  1.  Large-scale investment (including Transforming energy generation, storage and distribution; transforming industrial energy usage, especially  in the energy-intensive industrial sectors (steel, cement, ceramics, chemicals, pulp and paper) ; high-speed broadband internet connectivity to embed working from home practices ; investment in nature-based solutions for disaster resiliency.
  2.  Accelerate investment in high-sustainability impact technologies
  3.  Incentivize individual-level change – in transportation, home energy efficiency, and job training for green economy jobs
  4. Make Bailouts conditional on a legal commitment and a pathway and timeline to net-zero emissions, particularly for fossil fuel intensive industries such as airlines.

The paper concludes with proposals for institutional structures to implement these policies, including a Climate Change Emergency Committee and a Net Zero Delivery Body in the U.K. , and perhaps most remarkably, proposes an international Sustainable Recovery Alliance (SRA) to be launched at COP 26. The purpose: to act  “As a flexible “coalition of the willing” outside of the UNFCCC architecture, the group would promote a shared vision of a sustainable recovery.”

committee on climate change

And on May 6, the existing U.K. Committee on Climate Change issued a press release announcing its Letter to the Prime Minister, setting out six key principles to for a green recovery from the COVID-19 pandemic. The principles call for fairness to be embedded as a core principle,  a shift to new behaviours such as cycling and working from home, the possibility of raising carbon taxes, and,  “Support for carbon-intensive sectors should be contingent on them taking real and lasting action on climate change, and all new investments need to be resilient to future climate risks.”