In times of economic crisis, stimulus spending is important. But spending it wisely is even more important. In the midst of the climate and public health crisis you’d think we’d be on a recovery better path than we are today.
Efforts to get the economy running again have long-lasting legacies
It is well established logic that in times of economic downturns, Governments step in to stimulate the economy.
Investments in infrastructure and services that create jobs and return productivity growth (and taxes) kick-start a struggling economy. Governments borrow so people don’t have to. Government’s build things because the private sector does not (yes, this is a very generous simplification).
Each wave of historic recoveries have vested the governments of the time with an enormous amount of power to reshape and recast society, not least through the built environment. Think of the New Deal Work Progress Administration (WPA) projects that are still vital parts of infrastructure in the United States, nearly a century after they were built. Public money gets funnelled into creating public assets, particularly those that create assets of value to society while also creating jobs.
We know what a green recovery could look like
A wise, green recovery package would invest in tempering climate warming emissions and adapting to their impacts. Things like insulation and energy efficiency in buildings, restoring natural environments for flood prevention among other benefits, upgrading digital connectivity and electricity transmission infrastructure, building better sidewalks and cycle tracks, shifting transit to electric vehicles. All things that reduce energy waste and reliance on fossil fuels, enhance the public realm and quality of life and put people to work.
But in 2020, 23 years after the Kyoto agreement, five years on from the Paris agreement, we are repeating some of the same mistakes of the past. According to C40 cities “only 3 – 5% of an estimated US$12 – $15 trillion in international COVID stimulus funding is committed to green initiatives.”
Ontario falls into this trap too.