COVID-19 undoubtedly presents a huge social and economic challenge. Facing the twin challenges of a near-term crisis of employment and the long-term threat of climate change, green stimulus and keeping the focus on achieving net zero targets should be a key pillar of the UK Government’s fiscal response.
The paper focuses on:
- Economic restructuring – COVID-19 will lead to a fundamental restructuring of economies around the world.
- Government levers – Governments will be looking to use tax, spending and regulatory levers to deliver a cleaner, and more sustainable economy in future.
- A fiscal stimulus – the UK’s response to COVID-19 should be guided by decarbonisation goals in order to generate jobs and investment across the UK, to stimulate the future green industries and help the UK meet its legally binding target to reach Net zero by 2050(1).
- Decarbonisation goals – the UK government should make ongoing support for industries conditional upon achieving decarbonisation goals, as many other European countries have done(2).
- Clean power – unlike after the global financial crisis, many green forms of power generation are now as cheap as fossil fuels – investing in clean power makes sense from an economic viewpoint.
- ‘Shovel-ready’ infrastructure projects – the Government should look to bring forward ‘shovel-ready’ energy infrastructure projects, while, robust regulatory frameworks will be required to rapidly deploy key technologies required to reach Net zero.
- Private sector capital – by giving certainty to the market through regulatory standards, the government can attract private sector capital into these new industries, whilst limiting the direct impact on the public finances.
Click here to read our report : Green Fiscal Stimulus.