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Q&A: COVID-19 Fiscal Stimulus Policies Can Benefit Climate and Economies

Without data on the environmental and economic impacts of recovery policies during crises, policymakers work blindly or at the guidance of special interests. Pandemic stimulus spending data could point the way to creative policy decisions that benefit the climate, the economy, and public health.

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Authors:
Joshua E. Porterfield, PhD
December 1, 2021

One of the primary goals of the Coronavirus Resource Center is to aggregate pandemic data to inform policy decisions and to improve the nation’s response to the next public health crisis. Dr. Jonas Nahm, an assistant professor of Energy, Resources, and Environment at the Johns Hopkins School of Advanced International Studies (SAIS), is working towards establishing a similarly collaborative, public database that tracks the environmental impact from economic recovery legislation throughout the pandemic. Data on the environmental implications of economic recovery from crises has been missing from the public dialogue. Dr. Nahm and his team hope to fill that data gap to guide future policy decisions and devise a green recovery plan for the COVID-19 pandemic.

How is environmental data relevant to COVID-19?

The pandemic caused an economic recession, which, in the short run, led to emissions reductions. However, those emissions reductions were short lived. Emissions were already returning to pre-pandemic levels in many sectors of the economy by last summer when lockdowns ended. At the same time, governments were spending an enormous amount of money on economic recovery, trying to dispense funds very quickly to keep economies running. The interest of our research group is to study the extent to which governments used the recession and the need for economic recovery packages as an opportunity to invest in long-term climate change programming. That's the data that was missing from the conversation, and we've been trying to collect it.

We need to structurally change the sources of economic growth and development to benefit the climate and public health, which go hand-in-hand.

What data have you specifically been collecting?

Our team at the Initiative for Sustainable Energy Policy (ISEP) has been going through every economic stimulus bill for all G20 economies and coding them for the amount of money that was spent on measures that would reduce, increase, or remain neutral on emissions. Then, we've been working with Scott Miller from the Department of Environmental Health and Engineering to understand the actual emissions changes these projects would induce. For instance, if you give people money to replace their windows, it creates jobs and reduces energy loss, producing immediate and long-lasting emissions reductions from that direct investment. If you invest money in public charging stations for electric vehicles, you still need people to buy electric cars for that to yield emissions reduction, which may or may not happen.

The next stage of the project is determining why countries responded so differently. Are these countries that have a very pro-climate approach even in non-crisis times? Is this about the particular composition of domestic interest groups? Is it about institutions that shield the government from interest groups? The political science part of our project is about explaining these differing responses because that could also help us improve the green response during the next crisis, whether it’s a financial or public health crisis.

Policymakers are going into this blindly because there is not good data on the environmental return on economic recovery plans.

How can that data inform policymakers?

In general, we have very poor data on what governments do during crises with regard to climate and to what extent they're using these crises as opportunities to shift the economy in a sustainable direction. We also have very little data on the 2009 financial crisis, so there is little information for us to determine whether the United States is doing better or worse this time. What's important to us is to create a record of recovery strategies around the world and then model the impacts of these different measures. This allows us to determine where governments get the biggest bang for their buck in terms of economic recovery and emissions reduction. We hope that policymakers will use this data to make smart decisions about how to invest to create the exact jobs and emissions reductions needed. As governments around the world are now making pledges to reach net-zero emissions by the middle of the century, it will take precisely this type of data to pick policy measures that will reduce emissions and create new sources of growth.

How can we capitalize on the urgency of this public health crisis?

One thing we can do is to be very public about what's happening. Governments are not crafting recovery policy fully aware of the opportunities for emissions reductions that exist and that also yield better economic outcomes. We're hoping to establish a public database of these efforts that will both create some competition between governments as they see how they stack up against their peers, but also give people policy ideas going forward. We want to use information to motivate action. We can think of this pandemic as an experimental period where governments intervened much more actively in the economy than they normally do. There are policy lessons to be drawn from the efforts that have been taken on the climate front that could be applied to non-crisis times. Much work lies ahead of us to reach those net-zero goals and creative policy solutions are needed to get there.

How will your database be useful to the public and open to research collaboration?

We will put the data online to make it accessible to everyone and to spark more academic research. That was the problem with the lack of data on the 2009 financial crisis. There were some studies from think tanks and corporations about economic recovery policies from that crisis, but they didn't publish the methodology, which limited what academics could do with the data. We're trying to be very transparent about what we've done and the limitations of our data, and then make it accessible to other researchers, so there can be a broader research agenda that grows out of this project.

At this early stage of the project, we're also presenting this work to different policy and academic communities to see what would be useful to others. What are additional questions that we (or others) could be answering if we just added a few more survey points to our data collection efforts? I'm hoping to reach out to the broader climate policy community to see what interests them, making the data valuable beyond our immediate research team. The next stage of this work will be in cooperation with the University of Oslo and the Climate Research Institute in Norway. There is already an international team behind this effort, but we're reaching out beyond that to ensure we're collecting the right data to not just answer our specific questions, but other researchers’ interests as well.

Governments are not crafting recovery policies fully aware of the opportunities for emissions reductions that also yield better economic outcomes.

This data collection entails us weeding through thousands of bills and looking at the exact spending and emissions impact on different portions of the bills. We’re combing through a ton of material. Since we’re already doing it anyway, there might be two or three other data points we could code for, adding very little work for the team, but greatly increasing the data’s utility and value. Being thorough and inclusive in these early stages will prevent us from sitting here in two years and regretting missing certain critical data points.

Joshua E. Porterfield, PhD

Dr. Joshua E. Porterfield, Pandemic Data Initiative content lead, is a writer with the Centers for Civic Impact. He is using his PhD in Chemical and Biomolecular Engineering to give an informed perspective on public health data issues.