Promise of a green economic recovery post-Covid: trojan horse or turning point?

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A green economic recovery from Covid-19 cannot be built in the image of a pre-Covid era. Green growth must be abandoned.

The ensuing Covid-19 crisis has sunk the global economy into a deep and sudden recession (World Bank, 2020a). Governments and businesses have called for a ‘green economic recovery’ (GER) from Covid-19. Such a commitment is being welcomed by many as a promising and urgently needed intervention for planetary restoration. The economic recovery from Covid-19 represents a rapidly closing window of opportunity to steer development within a safe operating space for humanity on earth (Bennett, 2020; Helm, 2020; Lenzen et al., 2020). The post-Covid era must create a turning point from the current course of development and policy inaction which has failed to curtail human pressure on planetary systems thus far (Koundouri, 2020).

Within this paper, I argue that the GER, as it is currently deployed, represents a trojan horse for the same ineffective environmental policy response which predated Covid-19. I illustrate how the current GER agenda is not merely unambitious but stands to delay, disrupt and distance from necessary social and ecological transformation. However, I reason that an alternative response to Covid-19, guided by limits to growth and well-being, shows genuine promise of addressing the ecological crisis in a post-Covid era. Failure to critically evaluate the course mapped out for society and the economy post-Covid risks maintaining humanity on a course of planetary destruction.

Prior to the emergence of Covid-19, pressure on governments and corporations to tackle environmental issues was already boiling over. In 2019, the world witnessed the largest and most widespread protests calling for more urgent government environmental action (Laville & Watts, 2019). Trust in the status quo to respond to such calls was also dwindling (Gallup, 2020). However, the acute impacts and instability borne from Covid-19 has afforded prevailing systems of economic hegemony status as a source of security and normalcy; capitalism has become the least worst option against the backdrop of the current crisis. In turn, recovery from Covid-19, as viewed by governments and businesses, equates simply to a bounce-back to a pre-Covid world and a continuation of unsustainable GDP growth, consumption and trade (Sarkis et al., 2020). Ongoing discussion of what shape the global economic recovery might take with reference only to the course of (e.g. ‘V-shaped’, ‘U-shaped’ or ‘W-shaped’) and hopeful return to pre-Covid levels of economic output expose the limited promise of change between a pre- and post-Covid world (Rodeck, 2020).

Notwithstanding the design of a post-Covid world in the image of a pre-Covid era, GER has become an important aspect of the overall policy response to the current crisis. The direction of the GER agenda is revealed in recent policy initiatives and campaigns from international organisations, governments, businesses and non-governmental organisations (cf. EAC, 2020; IMF, 2020; Rathi & Seal, 2020; UN, 2020). GER measures have emerged from and for the normative objective of stimulating consumption, production and trade in order to remedy the social and economic burden of the Covid-19 crisis (Helm, 2020). To this end, the central prescription of the GER is to invest and screen stimulus spending associated with the global economic recovery from Covid-19 by ‘sustainable activities’ (Hanna et al., 2020). Such an investment-led and demand-driven approach to sustainability, better termed ‘Keynesian Environmentalism’ (Blackwater, 2012), attempts to grow the economy while minimising its environmental impact.

The growth imperative of the GER marks a continuity in the support for ‘green growth’ as a strategy to dematerialise and decarbonise the economy (Helm, 2020). The central tenet of green growth is that by full-pricing resource overexploitation, greenhouse gas emissions and pollution in markets' economic progress and environmental protection can be achieved in tandem. Over the past few decades, such thinking has emerged as the dominant policy response to the climate and ecological crisis, replacing the idea that economic growth is bound by physical resource scarcity and biophysical limits (Meckling & Allan, 2020).

The project of green growth is often criticised by appealing to the lack of progress made to tackle contemporary environmental problems. However, such critique overlooks the uneven and partial implementation of green economy proposals to date (Bowen & Stern, 2010). For example, fossil fuels are still subsidised by $5 trillion (Coady, et al., 2017), polluters do not pay widely or highly enough to encourage a shift to greener production (Best et al., 2020), and capital investment continues to prioritise brown rather than green infrastructure (Castree & Christophers, 2015). Indeed, we may never observe the full scope of green growth proposals in order to level a fair critique of their potential (Bowen & Hepburn, 2014). However, in my opinion, there are many reasons why the green growth project, even if fully released, will fail to redress the current ecological crisis.

Green growth suggests that economic growth can be decoupled from environmental degradation through improvements in technology and efficiency (Haberl, et al., 2020). In individual countries and globally progress within this context has been limited, with gains being offset by the scale of growth in material output (Parrique et al., 2019; Wang & Su, 2020; Ward et al., 2016; Wiedmann et al., 2015; Wu et al., 2018). This is not merely due to the infancy of the green economy project but the idealised assumption that decoupling can meaningfully curtail humanity's burden on the planet within a relevant time frame (Haberl et al., 2020; Jackson & Victor, 2019; Hickel & Kallis, 2020). Proponents of green growth argue that the emergence of a post-industrial society, where prosperity is driven by knowledge, digital technology and services, has rendered the economy weightless in terms of material demand (Coyle, 1999, p. 228), transcending scarcity and limits (Quah, 2019). Yet, despite their intangible nature, the resource demand of these sectors is not zero, but large and growing (Andrae & Edler, 2015), and do not replace basic needs such as food and shelter which too face inexorable limits to growth. In reality, post-industrialisation across the Global North has outsourced rather than reduced resource depletion and pollution, transferring the burden of consumption beyond country borders (Taherzadeh et al., In press).

A complete transition to renewable energy sources does not escape the biophysical limits to growth either, owing to their reliance on material devices for storage and transmission (Jackson & Victor, 2019). The growing body of evidence linking expansion of renewable energy to competition with food security (Capellan et al., 2017), ecosystems and biodiversity (Sonter, et al., 2020) and other finite resources (e.g. water, metals and land) (Fargione et al., 2010; Gerbens-Leenes et al., 2012; Konadu, et al., 2015), highlights the danger of promoting the green energy transition as a panacea for environmental ills. As I outline in the remainder of this paper, the current GER agenda not only ignores these observations, but also furthers a form of green growth less ambitious than many proponents of the concept itself, representing a trojan horse for environmentalism post-Covid.

1. Reinstating needs

In the aftermath of the 2007–08 financial crisis, we witnessed the same promise of a GER (Gawel & Lehmann, 2020). However, only a modest proportion of stimulus packages were earmarked for green investment (Koundouri, 2020). In the years that followed, carbon emissions and resource use increased dramatically (Peters et al., 2012). Then, as now, GER, offered a way to reinstate a weak form of sustainability, posited on the idea that continued economic expansion could be decoupled from environmental degradation and pollution through technological progress and market-based instruments (Bennett, 2020). Rethinking the GER agenda in relation to genuine human needs, rather than continued economic expansion, is necessary, recognising that these can be met at far lower levels of income and environmental degradation than we currently observe (see Akizu-Gardoki, et al., 2020; Millward-Hopkins, et al., 2020; Steinberger et al., 2020).

2. Rebranding inaction

The rhetorical force of the GER provides a powerful distraction from the modest commitments of governments and businesses to tackle contemporary environmental problems in recent decades. There is no sunk cost to rally behind such slogan. As Gawel and Lehmann (2020) note, the promise of green stimulus is likely to attract many unsustainable businesses simply interested in economic bailout post-Covid. Indeed, fossil fuel companies have aggressively lobbied policy-makers to relax the sustainability conditions of stimulus support (Yehle, 2020). Companies worth $2 trillion have called for a GER in response to the current pandemic but fall short of detailing ambitious measures towards this end (Rathi & Seal, 2020). The performative nature of such calls echo ongoing commitments to tackle climate change which fall short of the pledges made under the Paris Agreement (Höhne et al., 2020).

A recent survey of experts on the relative performance of fiscal recovery policies from Covid-19 found only a handful (5 of 25) would provide a positive climate impact with none promising an immediate effect (Hepburn et al., 2020). Early signs indicate the economic recovery from Covid-19 will entrench emissions and worsen environmental degradation (Forster, et al., 2020). A study of stimulus Covid-related across 50 largest economies, suggests only 0.2% of funds are targeting green measures (Bloomberg, 2020). Meanwhile, rescue packages for airlines and fossil fuel companies, expedited high-carbon infrastructure projects, and unsustainable agricultural practices have become the major beneficiaries of Covid-19 stimulus measures (Harvey, 2020). Calls by the World Economic Forum for a ‘Great Reset’ to Covid-19, couched within a commitment to ‘stakeholder capitalism’ (WEF, 2020), exemplifies the widening gap between the language and nature of change accompanying the GER agenda.

3. Rejecting alternatives

A vast landscape of futures exists for humanity to manoeuvre to post-Covid. However, the GER agenda prioritises market-orientated, technologically-driven economic expansion as the only feasible pathway to rebuild society and protect the environment in the aftermath of Covid-19. The emerging discourse coalition behind such vision comprises not only governmental organisations and industry lobbies but a growing number of think tanks, NGOs and civil society groups previously critical of green growth. These latter actors will likely scrutinise the details of the GER, advocating for their own policies and conditions in the process, but are unlikely to fundamentally depart from such a narrative (Spash, 2020). Within this context, there is need for critical reflection on how the normative and organisational structure of environmental institutions lends weight to such agendas (Jasanoff & Martello, 2004). Genuine detractors of the GER, or those calling for more radical ecological and social change, will likely be viewed as increasingly disruptive to the mission of ‘progress’, ‘recovery’, ‘stability’ and ‘sustainability’ post-Covid (Lamb, et al., 2020). If the current GER agenda is presented as an alternative to the pre-Covid systems and policies which it appears in fact to embody, real alternatives will become forced to the peripheries of debate and practice.

4. A turning point?

The current GER agenda does not appear to signal a turning point in the exploitative relationship between socio-economic systems and the environment. A GER from Covid-19 requires a departure from the prevailing logic that the environmental toll of continued economic expansion can be ameliorated by market forces or technological progress alone (Bennett, 2020; Kallis & Bliss, 2019; Schor & Jorgenson, 2019; Smith, 2016). As Wiedmann et al. (2020) note, the current ecological crisis invites an examination of capitalism as the root cause of unsustainable consumption patterns and production practices. The strong association between wealth and environmental impacts, within and between countries (Golley & Meng, 2012; Grunewald et al., 2014; Hubacek et al., 2017; Weinzettel et al., 2013), shows that contemporary environmental problems are driven disproportionately by affluence in high-income countries. Although the notion of common but differentiated responsibilities has attracted support within environmental policy discussions, truly redistributive economic policies remain absent from the mainstream environmental policy agenda and the evolving discussion around the GER. Attention to inequality is warranted not only in relation' greening the economic recovery, but also tackling poverty which has grown dramatically in the wake of Covid-19 (World Bank, 2020a).

The GER requires a commitment to sustainable consumption. Recent studies indicate that supply-side measures (i.e. efficiency, standards and subsidies) alone are insufficient to curb unsustainable levels and forms of industrial and agricultural production (Bennett, 2020; Creutzig et al., 2018; Helm, 2020). Far reaching lifestyle changes appear necessary as part of any ambitious strategy for planetary recovery (Bajželj et al., 2014; Dubois et al., 2019; Mundaca et al., 2019; Rogelj et al., 2018). Lockdowns, social distancing and travel restrictions to manage the spread of Covid-19 have led to profound changes to living, working and consumption patterns. Although positive, the marked fall in emissions and pollution that accompanied such socio-economic shifts (Lenzen et al., 2020; Le Qúeŕe et al., 2020; Liu et al., 2020) represents a brief hiatus in the tight embrace between capitalist economic growth and environmental degradation (Helm, 2020). Indeed, as economies have begun to recover, such positive environmental improvements have reversed (Zheng et al., 2020). Less conspicuous forms of consumption continue to disguise this trend. Web shopping has replaced street shopping; increased personal demand for electronics and electricity has rescaled office-related consumption' to our homes and entertainment has shifted from a service to goods-based industry (Stackline, 2020). We are still unsure as to the net environmental impacts of these changes and whether this ‘new normal’ of consumption behaviour is more or less environmental damaging. In any case, any environmental gains from recent consumption trends, while far from being sufficient to avert dangerous climate change, are not socially sustainable, as illustrated by the millions additional people unemployed, impoverished and disconnected due to Covid-19 (Lenzen et al., 2020; World Bank, 2020a, 2020b).

A GER from Covid-19 will need to be guided by different actors, actions and measures of success to those currently leading the green agenda. Indicators of well-being, discrimination, education, nutrition and environmental quality will require greater mainstreaming where they have been discounted at the expense of macro-economic targets (Costanza et al., 2014; Coyle, 2012; Fioramonti, 2016; Kallis & Bliss, 2019). Covid-19 has reaffirmed the importance of these foundational dimensions of our lived experience. The importance of community relations and mutual aid within this context highlights the need to devolve more power and resources to local authorities, organisations and actors to respond to the uniquely stratified effect of Covid-19 on society. Greater coordination is also needed at a transnational level given the globalised nature of Covid-19, the economy and contemporary environmental problems. Guiding society between social conditions and planetary boundaries, as proposed by Raworth (2017), provides an organising framework for GER post-Covid. Meanwhile, the theory and practice of degrowth (Kallis, 2018), social ecology (Clark, 2009) and sustainable transition (Henry et al., 2020, Rosenbloom, et al., 2020), provide useful entry points to understand the structural barriers to social and ecological transformation.

Nevertheless, several challenges face the implementation of alternatives to green growth. They do not all share the same critique of green growth, nor agree if and how their proposals can co-exist with the realpolitik. While claims that so-called ‘radical’ or ‘transformational’ alternatives to economic growth are universally beneficial needs greater substantiation, theoretically and empirically (Blythe et al., 2018). The localist imperative of green growth detractors is a position which requires particular scrutiny when viewed within the context of macro-scale technologies, policy interventions and targets which can support sustainable transition (Robbins, 2020). Interrogation of such proposals must also challenge the view of the Global North as an exemplar of development success, expertise and solutions to tackle global challenges (Oldekop et al., 2020). Indeed, Covid-19 has exposed the unpreparedness of all countries to manage with the pandemic and its fallout with many wealthy nations dealing worst. Less esoteric dialogue is also needed to create inclusive forums to advance understanding of and alternatives to green growth post-Covid.

Covid-19 has revealed the immense adaptive capacity of economic and social structures, systems and norms (Howarth et al., 2020). Remote working and economic support for furloughed labour forces have illustrated vastly different modes and levels of work are possible and currently consistent with improving public safety from Covid-19 (Brynjolfsson et al., 2020). While physical distancing measures and mask wearing has illustrated the willingness of individuals to cooperate and sacrifice to achieve wider population benefits (Cheng et al., 2020). Such acts of solidarity may provide important insights for policies aimed at promoting sustainable behaviour change which too have a growing mandate from society. A recent study by Ipsos (2020) suggests two-thirds of citizens around the world regard the climate crisis as seriously the current coronavirus crisis. Meanwhile, national governments have realised the importance of domestic and local self-sufficiency as Covid-19 has uprooted trade links and exposed the risks of globalisation (Vidya & Prabheesh, 2020). These changes create an enabling environment to design and practice more transformative pathways to GER after and even during the ongoing Covid-19 crisis.

However, the current Covid-19 crisis is a poor analogue for the ensuing ecological crisis and the GER agenda must recognise this. Although both crises invite early action in the absence of technical fixes (Mazendo & Manning, 2020), highlight the importance of social compliance in mitigation (Betsch et al., 2020), and impose highly uneven impacts across different countries and communities (World Bank, 2020b), they differ in several respects. First, Covid-19 can be brought under control in a targeted manner with a predictable outcome. In contrast, the response of global environmental change to interventions is complex and unpredictable. Second, the effects of policies to curb Covid-19 are less diffuse, geographically and temporally, when compared with environmental policies, potentially derailing public and policy support for the latter. Third, although mitigation efforts for Covid-19 (e.g. mask wearing, social distancing and remote work) have become normalised, sustainability norms are still not widely practiced nor viewed as desirable (Howarth, et al., 2020). Consequently, the GER agenda, in its current or reformed form, will need to encompass a broad suite of measures, overcome the collective action problems surrounding their implementation, and offer a positive spectacle of a sustainable post-Covid future.

The purpose of this commentary is not to reject the need for a GER, but highlight the need for an urgent inquiry into its ambition, scope and transformative potential. Against the backdrop of the current Covid-19 crisis lies an opportunity for rebuilding a more sustainable and equitable society. If the GER is to respond to this need, it needs to manoeuvre humanity on a more decisive course. We must be open to the many pathways that exist, but also cautious of those that do not offer a turning point.