Will the green shoots of recovery lie in a green economy?
AFTER any economic downturn, the hunt for the green shoots of recovery begins.
Every economic indicator, from consumer and business confidence surveys, car sales data, house purchases and prices data, and retail footfall counters to job listings, redundancy announcements and unemployment statistics will be pored over for any signal that the recovery is under way.
As things stand, we may be waiting quite some time for a firm sense that the worst of the economic downturn is behind us.
Having re-opened, many businesses are struggling for custom and news of localised lockdowns in parts of England and the tightening of travel rules, such as a quarantine rule for those returning from holidays in Spain, is knocking confidence that the recovery is around the corner.
In an effort to bolster this shaky confidence, the UK government is injecting significant sums of money into various supports and measures, such as job retention schemes, ‘eat out to help out’, stamp duty and targeted VAT reductions among others.
While these schemes are largely aimed at getting the consumption driven economy we had before Covid-19 back as quickly as possible, the lockdown, and associated changed ways of living and working we have experienced have prompted increasingly vocal calls for this to be a moment where we grasp a new, greener, economy.
In recognising the potential for investing in carbon reduction measures to stimulate an economic recovery, the UK, and indeed many governments around the world, are investing in a range of green stimulus measures.
With the UK becoming the first major economy to commit to a 100 per cent reduction in greenhouse gas emissions by 2050, is it now time for Northern Ireland to get on board with a Green New Deal?
A Green New Deal is by no means a new idea. In fact, the first result from a quick online search for ‘Green New Deal for Northern Ireland’ is from 2010 and notes how then, as now, there was a strong articulation that the path out of a deep and damaging economic downturn was deemed to be through a Green New Deal.
That wide reaching plan envisaged the refurbishment of tens of thousands of existing homes each year with full insulation and renewable energy. It also envisaged the transformation of the energy performance of public and commercial buildings through energy efficiency measures, decarbonising electricity and heat through large-scale renewables, micro-generation and using fossil fuels more efficiently and the creation of thousands of jobs related to the various green initiatives that would have been rolled out.
The desire to improve the energy efficiency of housing here is worth reflecting on. Our housing stock is not generally regarded as being energy efficient. Approximately 25 per cent of our carbon emissions come from our domestic buildings and at the last study of our housing conditions, more than half of our housing stock fell below an energy rating of A-C.
Addressing this issue with retrofitting energy efficiency could be a quick route towards making a significant improvement in our carbon emissions and creating economic activity. Not only that, energy efficient homes reduce fuel costs and improve health outcomes for residents.
The potential for green growth to lead us out of recession is recognised by the economy minister Diane Dodds. She notes that companies that are active in the low carbon and renewable sector are generating turnover of about £1 billion per annum. That’s the same scale of turnover we generate from tourism.
The minister also highlights the potential for decarbonisation in power, heat, and transport as central to our environmental aims and has cited the potential for Northern Ireland to become a centre of excellence for the hydrogen economy.
It is important to note that greening the economy doesn’t have to be about cutting edge, grand new ideas. The International Labour Organisation defines green jobs as being decent jobs that contribute to preserve or restore the environment, be they in traditional sectors such as manufacturing and construction, or in new, emerging green sectors such as renewable energy and energy efficiency.
It is also worth remembering that the reduction in car use during the recent lockdown and increases in walking and cycling pointed towards the carbon reducing potential of removing polluting vehicles from our roads.
Shifting more of us to green public transport and battery powered/hydrogen powered vehicles could be another key part of a Green New Deal.
A decade or more may have passed since the last big push for a Green New Deal for Northern Ireland. Maybe this time, a greater sense of urgency and a greater appreciation of the societal and economic returns will prompt action.
Andrew Webb is chief economist at Grant Thornton in Northern Ireland