A Uniper energy company coal-fired power plant and a BP refinery are seen beside a wind generator in Gelsenkirchen, Germany, Jan. 16, 2020. 

Did the world 'build back better' since the start of the pandemic? Not so much. 

Two years into the pandemic, stimulus money around the world has largely fallen short in transforming the energy economy. 

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In the early days of the pandemic — when greenhouse gas emissions plummeted and wildlife was taking over cities — many wondered if this could be a turning point for climate action. 

In the months that followed, the world adapted to new ways of working, traveling and transporting goods — all signs pointing to the potential for a healthier environment.  

It was “a chance to set the world on a cleaner, greener, more sustainable path,” United Nations Secretary-General António Guterres said

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As governments rushed to spend trillions in economic stimulus to keep their economies afloat, some also set out to make a more climate-friendly economy.

President Joe Biden’s “build back better” campaign slogan came with a heavy emphasis on renewable energy infrastructure and green jobs. Across the pond, UK Prime Minister Boris Johnson agreed

But two years into the pandemic, stimulus money around the world has largely fallen short in transforming the energy economy. 

“I think governments have built back slightly better, but haven't built back good enough."

Joel Jaeger, researcher , World Resources Institute

"I think governments have built back slightly better, but haven't built back good enough,” said Joel Jaeger, a researcher at the World Resources Institute who’s been tracking recovery spending since the pandemic began. 

The International Energy Agency finds that $470 billion or 3% of total stimulus funding from governments around the world went toward clean energy and sustainable recovery measures, though it makes up 20% of total “recovery funds” that came after the initial rescue-spending phase.   

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Spending on clean energy from 2021 to 2023 will be about 30% higher than it has been in recent years, the IEA estimated last summer, but that’s only a third of what’s needed to reach global climate targets. 

Slicing the numbers a little differently, G-20 countries (which account for more than 80% of global emissions) spent 6% of total stimulus funding in areas that would cut greenhouse gas emissions, according to a new analysis published by a team of Johns Hopkins University researchers in Nature this month. 

In India, China and South Africa, the analysis found, pandemic spending on coal means stimulus funding is projected to cause a net increase in greenhouse gas emissions.

“Ongoing annual support to fossil fuels will likely surpass all the one-off green recovery spending in the next couple of years and undermine efforts to meet the Paris climate goals."

Organization for Economic Development

“Ongoing annual support to fossil fuels will likely surpass all the one-off green recovery spending in the next couple of years and undermine efforts to meet the Paris climate goals,” according to the Organization for Economic Development

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Globally, many of the pandemic stimulus payments went toward health care, wages and social safety net programs. 

But many of those payments went to businesses “without making any climate requirements,” said Jonas Nahm, an assistant professor of energy resources and environment at the Johns Hopkins School of Advanced International Studies and co-author of the Nature article. 

For example, Nahm said, almost every G-20 country bailed out airlines. Only France made that money conditional on meeting climate goals.  

“We really just invested a huge amount of money in the economy to try to get it back to exactly where it was, while we were talking about how we needed to do things differently."

Jonas Nahm, assistant professor of energy resources and environment, Johns Hopkins School of Advanced International Studies

“So we really just invested a huge amount of money in the economy to try to get it back to exactly where it was, while we were talking about how we needed to do things differently,” Nahm said. 

The European Union and South Korea were exceptions, both spending more than 30% of total stimulus funds on emissions-reducing measures. 

Both had decarbonization plans in place ahead of the pandemic, allowing stimulus funds to go toward fast-tracking existing policy priorities.

South Korea’s $60 billion Green New Deal, part of its larger pandemic stimulus package released in July 2020, earmarked money for installing solar panels and insulation at nearly 3,000 schools, and building new renewable energy systems in dozens of island communities.  

Sung-Young Kim, a political scientist at Macquarie University in Sydney, said a main focus of the stimulus package was preparing the country for more renewable energy. They installed energy storage systems in factories and residential buildings, recharging facilties for electric cars, and also refueling for hydrogen vehicles, she explained.  

Since 2008, “green growth” has been the backbone of South Korea’s economic development strategy. S,o for Korean leaders, Kim said, it was obvious they should funnel stimulus money in that direction.

“[South Korea's Green New Deal] aim is to see climate change as a new source of economic growth that they can exploit. ... I really do think that fighting climate change and reducing emissions is probably a secondary goal.”

Sung-Young Kim, political scientist, Macquarie University, Sydney, Australia

“First and foremost, [in] the Green New Deal, the aim is to see climate change as a new source of economic growth that they can exploit,” Kim said. “I really do think that fighting climate change and reducing emissions is probably a secondary goal.” 

The picture has been very different in developing and emerging economies where the pandemic “compounds preexisting challenges,” according to the OED. 

“[Developing countries] didn’t have the money, or new money, I should say, over and above what was required to respond to the pandemic, to begin to look at a so-called green recovery."

Malango Mughogho, managing director, ZeniZeni Sustainable Finance

“They didn’t have the money, or new money, I should say, over and above what was required to respond to the pandemic, to begin to look at a so-called green recovery,” said Malango Mughogho, managing director of ZeniZeni Sustainable Finance. 

People already living on the margins, Mughogho said, fell into “the abyss of further poverty” when the pandemic hit. Vaccines were slower to arrive in many developing countries, so the initial emergency phase of pandemic spending lasted longer than in richer nations. 

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Even countries seen as leaders on the Paris Agreement did not make commitments to the kinds of funds required to meet the agreement’s target of getting to net zero emissions by 2050. 

“I think what surprised us the most were countries that have very good climate rhetoric, but then actually really fell short of their promises when it came to spending money,” Nahm said. 

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The UK, Canada and Japan all committed less than 10% of recovery funds to causes that would reduce emissions, Nahm’s team found. 

In the US, it was less than 1% — about $25 billion out of a $6 trillion stimulus.

Biden has been unable to push his major climate legislation through Congress, and now $555 billion in clean energy tax incentives face an uncertain future. 

And now, two years into the pandemic, the global energy economy is at another inflection point. 

Countries trying to move away from Russian oil and gas are looking to alternate energy sources to fill the gap. 

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This may push countries closer to — or farther away from — the emissions targets they committed to in the Paris climate agreement. 

Jennifer Layke, the global director of energy at the World Resources Institute, said she’ll be watching government spending and tax incentives closely for signs. 

“Right now, I’m looking to see whether or not they do better in meeting those kinds of commitments than they did with the stimulus packages,” Layke said. 

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