Global Spotlight Report #29: The Greening of Industry Recovery Programs

Introduction

COVID-19 has wreaked havoc on the economies of most countries. Major industries, such as tourism, car manufacturers, and aviation have been affected. Governments have sought to stem this economic downturn by offering hard-hit industries economic recovery packages in the form of loans, credit guarantees, and employee protection programs.

Unfortunately, in the haste to address economic recovery, many governments have neglected to address the important climate issues related to affected industries. In Report 29, Climate Scorecard Country Managers tell us whether or not their governments are including climate guidelines as part of the economic recovery programs they are offering to hard-hit industries. While there are some good examples, many countries have yet to incorporate such guidelines.

Indonesia, for example, has just passed a large economic recovery program that includes environmental deregulation; Australia’s recovery efforts are focused on the expansion of the natural gas industry rather than a recommended focus on zero emission technologies; Japan’s efforts to revive its faltering tourism industry do not yet include provisions to reduce the industry’s high carbon footprint; and the United States Congress is providing $50 billion in grants and loans to US airline industries, but the program lacks any climate provisions.

Some countries are taking steps forward in the right direction. For example, China is increasing the manufacturing of electric vehicles, though it also needs to take steps to ensure the provision of low-carbon sources of electric power; Spain is curtailing air transport in an effort to green its aviation industry; and France is demanding that automotive companies focus on decarbonization in exchange for bailout funds.

While it is understandable that economic recovery is at the forefront of COVID-19 economic policy, governments have an important opportunity to include climate guidelines in their bailout programs. Not taking advantage of this opportunity now will likely have dire consequences for the well-being of our planet.


Country Reports

Retrofitting the Aluminium and Steel Industries in Australia

Even before COVID, Australia’s steel and aluminium manufacturing industries were at an interesting crossroads. Aluminium smelters in Australia currently operate at a massive financial loss and require significant government subsidies. Australian steel-making produces a relatively expensive product that often struggles for relevance in a crowded market. And, both have suffered from long-term uncertainty over climate…

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Brazil Can Reduce Its Carbon Footprint as Part of Its COVID-19 Economic Recovery Program

In the last Climate Scorecard report for Brazil, we discussed how Land Use and Land Cover Changes (LULCC) are a pressing concern for Brazil’s commitment to emission reductions targets in terms of climate mitigation. In particular, the agribusiness and logging industries and consequential large-scale tropical deforestation (motivated by the extraction of high-profile wood such as…

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Energy Reforms Are Needed to Support Increased Use of New Electric Vehicles in China

In post-COVID-19 pandemic efforts to revive the economy, China’s government has so far – unlike other countries – resisted issuing a large stimulus package. Instead, the current stimulus measures amount to 2 trillion RMB – split into government bonds and financial relief measures – are targeted at spurring innovative technologies and consumption to stabilize employment…

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Climate Bailout Guidelines for Affected Industries in the EU

The impact of COVID-19 on the world economy is huge. Closure of borders, restrictions on traveling, and dramatic reduction of commercial flights have led to an unprecedented drop in the number of tourists worldwide, nearly leading to a collapse of the tourism sector in many countries. Tourism is considered to be a major world industry…

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French Government Demands Automotive Companies Focus on Decarbonization in Exchange for Bailout

The automobile manufacturing industry is among the economic sectors that have been heavily affected by the COVID-19 pandemic in France. The PSA Group (owner of the brands Peugeot and Citroën) and the Renault Group are the second and third largest automobile producers in Europe. In 2019, the two groups together sold over 7 million cars…

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Government Bailout Package Does Not Go Far Enough to Support the De-Carbonization of German Industries

Germany is often seen as the engine of Europe in the context of industry, its rising economy, and international exports. But Germany has not been unaffected by the Coronavirus Pandemic. The Kiel Institute for World Economy remarked that the first two quarters of 2020 show the smallest amount of industrial production in decades. It is…

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Climate Bailout Guidelines for the Automobile Industry in India

The COVID-19 pandemic in India, like everywhere else, has adversely impacted the Indian economy across many sectors. The most affected sectors include automobile, aviation, retail (including tourism and services), construction, and real estate, among others. The automobile sector, in particular, has been the most adversely impacted. The industry contributes approximately 7.5% of the nation’s GDP…

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Japanese Government Neglecting Climate As It Seeks to Bailout Ailing Tourist Industry

2020 was predicted to be a splendid year for tourism in Japan. Since Tokyo would be hosting the Olympic and Paralympic Games, the government had aimed to attract a record-high 40 million visitors. Even in January, hotels, ryokans, and airlines were eagerly rolling out promotional campaigns and preparing for an influx of travelers. However, as…

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Mexico Needs a Renewable-Based Infrastructure to Support the Production of Electric Vehicles

The three major industries in Mexico are automotive, aerospace, and medical device manufacturing. One of the reasons for auto companies to move to Mexico is its location, with its closeness to the United States and the possibility that its western ports allow OEM manufacturers and Tier 1 and Tier 2 suppliers to export goods to…

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Russian Airlines Hit Hard by the COVID-19 Pandemic

In 2019, all Russian airline companies increased passenger transportation numbers by 10% compared to 2018 – up to 128 million people. More than 47% of the passenger traffic was accounted for by the Aeroflot group, which includes the airlines Aurora, Aeroflot Russian Airlines, Pobeda and Rossiya. In 2019, Aeroflot employed approximately 30,300 people; Rossiya employed…

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Climate Bailout Guidelines for Saudi Aviation Industry

Saudi Arabian Airlines and the aviation sector has been hard hit by the COVID-19 virus outbreak. The aviation sector makes a major contribution to the Kingdom’s economy as it generates $36.5 billion gross value and supports 594,000 jobs. The airlines own and operate jet aircrafts that offer scheduled passenger and cargo transportation services. The suspension…

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Saving the South Korean Tourism Industry with Eco-tour Certification

South Korea’s tourism/travel industry is dying as the corona virus cuts global transportation. From January to April in 2020, consumption spending on tourism and leisure in South Korea decreased by 21.2% and 11 trillion won from the same period last year. If current trends continue throughout the first half of the year, tourism revenues are…

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Curtailing Traditional Air Transport in Efforts to Green Spain’s Aviation Industry

In early May 2020, the Spanish cabinet approved an important new climate law draft, with the objective of net-zero emissions by 2050. The plan also included an estimated €200 billion in investment, the creation of 350,000 new jobs, and a boost to the national economic growth by 1.8% over the next ten years. This is…

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Thailand Government Has Yet to Respond to Requests to Help Automobile Industry Hurt by COVID-19

Thailand’s automobile industry has been badly hurt as a result of COVID-19. The automotive industry in Thailand employs around “850,000 people and contributes about 10% to the country’s GDP”. It has been estimated by the Federation of Thai Industries (FTI)’s automobile club that total car production in the country could be cut in half during…

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Indonesia Post COVID-19 Economic Recovery Strategy Includes Environmental Deregulations

The draft omnibus law should ‘green’ Indonesia’s infrastructure and agriculture production Indonesia has lost 3 million jobs because of the pandemic, bringing the unemployed figured to 10 million. Social assistance claims have skyrocketed; in West Java alone, 38 million of 50 million applied. Before the pandemic, there were 9 million claims in West Java. President…

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Turkey’s 11th Development Plan Needs to be Updated to Ensure a Green Recovery for Sectors Affected by COVID-19

COVID-19 has had worldwide consequences, both as an outbreak and in terms of the globalized world economy. According to the World Bank, the global economy will shrink by 5% and GDP per capita by 6.2% due to the pandemic. For Turkey, which is already in an economic crisis, the situation is even more critical. According…

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US Aviation Bailout Program Lacks Climate Provisions

The commercial aviation industry has been hit hard by the COVID-19 pandemic, both in the United States and globally. The drastic drop in demand from both business passengers – with remote work, most regular business travelers can instead use video conferencing – and leisure passengers – with most of the world in lockdown, few are…

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UK Bailout Guidelines for the Construction Industry

Following the COVID-19 lockdown, many UK industries have taken a hard hit after months of closures and furloughing of staff. The top three most impacted industries are education, hospitality and construction. This report will specifically evaluate the construction industry in light of a green economic recovery plan post-lockdown, assessing the ways the construction industry can…

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