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OPINION: Not just emissions: why a green recovery from Covid-19 means more jobs

by Maria Mendiluce | We Mean Business
Monday, 23 November 2020 15:10 GMT

An aerial view shows power-generating windmill turbines in a wind farm in Graincourt-les-havrincourt, France, November 7, 2020. Picture taken, November 7, 2020 with a drone. REUTERS/Pascal Rossignol

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Companies can show real leadership by partnering with governments to ensure that green stimulus measures translate into good jobs

By María Mendiluce

Maria Mendiluce is the CEO of the We Mean Business coalition.

Since the Covid-19  pandemic began it has become clear that even an international health crisis doesn’t lessen other global crises like climate change or racial inequality. 

It has also illustrated that the hardships that come with a widespread economic slowdown need to be tackled urgently. 

Estimates from the International Labour Organization suggest that the second half of 2020 will see a decline in global working hours equivalent to the loss of 34 million full-time jobs. 

This is a seismic loss for communities struggling with the health impacts of the virus, with the added tragedy that these impacts are often felt more acutely by vulnerable people, including those in developing economies and black and ethnic minority communities. 

It is therefore essential that as governments work to boost economies they do so in a way that eases the social divide, reduces political tensions and addresses the climate crises. 

Limited funds must be deployed as effectively as possible to set economies on the right track, to recover in a way that delivers good jobs, builds resilience and tackles other systemic issues including the climate crisis.   

Businesses are publicly backing this approach. Since the outbreak, more than 1,200 major global companies have called on governments to invest in climate action and recover better through a series of high-profile letters and direct advocacy. 

Some governments recognize the benefits of a green recovery with at least 30 countries including measures directed at supporting the transition to greener economies as part of their recovery programs. Leading this charge, the European Union unveiled a €750 billion coronavirus recovery package with the Green Deal at its heart. 

But all governments should be taking the approach of supporting the transition to greener economies because there is clear evidence that doing so also benefits jobs. We quantified the jobs that could be gained from a green recovery and found that green recovery plans boost income, employment and GDP better than return-to-normal stimulus measures, with the added benefit of reducing emissions. 

Globally and across all the geographies modelled (the EU, Spain, Germany, Poland, the UK, USA, Japan and India), green recovery plans were found to be more effective than solely cutting VAT rates.

The green recovery plan in our analysis was modelled at an equal cost to governments as a ‘return to normal’ VAT cut but it includes public investment in energy efficiency, wind and solar power, electricity grid upgrades, tree planting programs and car scrappage schemes in which subsidies are only provided to electric vehicles.  

While both recovery plans provide immediate boosts to output and employment, the positive impact is consistently larger in the green recovery plan. 

For example the green recovery plan in the U.S. would deliver nearly 1 million more jobs than the return-to-normal plan and there would be 7% reduction in greenhouse gas emissions reduction globally by 2030 if the five point green recovery plan was implemented. 

This report is one of a growing number of examples of how green stimulus measures boost job creation. 

The International Renewable Energy Agency (IRENA) also estimates that renewable energy could employ more than 40 million people by 2050 and that total energy sector employment can reach 100 million by 2050, up from around 58 million today. This makes it clear that for governments to invest in any other way would set the world on course for economic and environmental disaster at a time when we need to build resilience. 

However, stimulus measures alone are not enough. Governments also need to ensure that the measures can be fully implemented by pairing them with appropriate policy interventions to drive the full decarbonization of every system of the economy. 

Governments and businesses must see this as an opportunity. Those that don’t embrace key drivers of the transition, like renewable energy, risk being left behind the ‘s-curve’ - the typical pattern of industrial transition,  as seen in the switch from horses to cars or landlines to cellphones.  

Companies can show real leadership by partnering with governments to ensure that green stimulus measures translate into good jobs, and ensuring that workers in high-emitting industries are being transitioned to good low-carbon jobs as part of a Just Transition.  

We need bold action to get us out of this jobs crisis, while tackling the ongoing climate crises. This requires a recognition of the potential of green industries which will not only create jobs but also reduce emissions and help create a zero-carbon, resilient economy.  


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