Which Country Has The Greenest Stimulus Package? Updated June 1, 2009

Filed under: Outside The US,Policy | |

Updated:   March 20, 2009.  The US is not the only country looking to renewable energy as a way to boost its economy by providing opportunities  for increased investment,  building low carbon efficiency into the infrastructure and creating millions of jobs.  Australia, the European Union, South Korea, China, Germany, Japan, Italy, Canada, France and the United Kingdom are all using similar strategies to address the crisis.

We have created a comparison table with a brief overview of the countries green programs below.

International Green Stimulus Profile

Country

Amount Spent on Fiscal Stimulus

Amount Spent on Green Measures

Green Measures as a Percentage of Total Stimulus

China

$586.1 billion

$221.3 billion?

38%?

United States

$972 billion

$112.3 billion

12%

South Korea

$38.1 billion

$30.7

81%

European Union

$38.8 billion

$22.9 billion

59%

Germany

$104.8 billion

$13.8 billion

13%

Japan

$145.9 billion

$12.4 billion

3%

France

$33.7 billion

$7.1 billion

21%

Canada

$31.8 billion

$2.6 billion

8%

Australia

$26.7 billion

$2.5 billion

9%

United Kingdom

$30.4 billion

$2.1 billion

7%

Italy

$103.5 billion

$1.3 billion

1%

These figures are based on Financial Times’ interactive graphic, which displays the amount of stimulus money each country is committing, the amount and percentage devoted to green initiatives and a description of each country’s green projects.

Below is an overview of how each country is planning to spend their green stimulus funds.

Australia – While Australia signed the Kyoto Treaty in 2007, they have only recently begun to seriously address high carbon/green economy issues.    They plan to introduce a carbon cap and trade system.  They also have directed 9% of their stimulus funds to go to energy efficiency

Canada – While Canada signed the Kyoto Treaty, they have not yet taken any aggressive steps to address greenhouse emissions.    They are allocating $2.6 billion to be used over five years to promote renewable energy and green jobs.  Canada is committing $126 million to waste water and drinking water projects; $388.6 million will be used for inner city rail; and they are allocating $116.6 million to low carbon power production research.

China – China didn’t sign the Kyoto treaty, but as their economy has expanded over the past decade, their carbon emissions have grown by 250%, As a result, they are now beginning to address climate change issues.  Exact figures for how much of their stimulus is allocated for environmental and renewable energy projects are unknown.  According to the Financial Times, the HSBS estimate that 38% of the stimulus is very high.  China concurs.  Over $51.1 billion has been allocated to renewable energy projects, including energy efficient building and low carbon vehicles.  Up to 73.1 billion will be spend on rail projects. –however, significantly more will be spent on roads.  Much of China’s stimulus is directed at construction projects.

Updated  March 20, 2009: In the interest of salvaging China’s economy, many environmental programs have been sidelined for  energy-intensive sectors and large infrastructure projects, many of which have been on the books for years but slowed or halted by negative environmental assessments.  Environment Vice Minister Pan Yue – a staunch and progressive advocate for the environment – has been sidelined and stripped of his responsibilities overseeing Environmental Impacts Assessments of large projects.

Updated May 28, 2009: That was then, this in now… and March was a a lifetime ago with regard to this global recession.  After years in which China put economic growth before almost all environmental considerations, there has been a dramatic change in attitudes from the government.  The country’s leadership is now putting a focus on climate change. They are now showing the political will and backing that up with a significant financial investment. This change is due to the country’s leaders coming to the realization that long-term growth in dependent on reduce power using and  energy efficiency. They are also seeing that pollution is having a devestating effect on the people and its industries.  According to government reports, over 10 percent of birth defects are caused by pollution and in some areas, the water is so contaminated that it can not even be used by factories.

In 2009 and 2010 China will now spend more than six times America’s green stimulus spending as a percentage of their respective economies.China is now ramping up its commitment to alternative energies as such a rapid pace, it is hard to keep up.  New green edicts are being issued from Beijing on an almost weekly basis and public attitudes twoard renewable energy are also starting to change.    For example, officials pledged to generate 100 gigawatts of electricity from wind power by 2020, more than tripling the original target of 30GW laid down in a national energy strategy published just 18 months ago.  As part of China’s stimulus, China is also investiong in nuclear, solar and hydroelectricity. Investment is also being poured into China’s electricity grid to enable more renewable sources to be connected, while planners say they want to reduce carbon dioxide emissions per unit of GDP by 50 per cent by 2020. There are also reports that China’s is, for the first time, actively considering setting emissions targets ahead of negotiations for a successor to the Kyoto treaty in Copenhagen later this year and that they are also preparing to take an unprecedented lead at Copenhagen.

European Union -Adding onto the European Union’s already huge commitment to green measures prior to the economic collapse, they have allocated over has committed over 59% of their stimulus funding to green programs.  However their efforts to promote green investments using a market based cap and trade mechanism has been undermined when the system crashed last summer sending the price from $38 to about $14 is February.  This also exposed a rarely mentioned weakness of cap and trade systems.  The EU recovery plan proposed last November is promising an increase of funding over the next two years for green infrastructure initiatives in the EU by $15 billion. In addition it will direct over $22 billion to wind power grids and carbon sequestration.  The plan also proposes that individual member states lower the value added tax for green products. The plan will be finalized in a Brussels summit in next week.

Updated April 7, 2009: The European Parliament’s industry committee has challenged the EU executive over its choice of green projects to be funded under the EU’s economic recovery plan, calling for investment in energy efficiency and smart cities instead of carbon capture and storage.

Update April 13, 2009: The EU’s economic recovery plan will invest funds not spent by September 2010 in energy efficiency and “smart city” projects, as it amended the European Energy Programme for Recovery.  A team of Industry Committee MEPs led by EP rapporteur Eugenijus Maldeikis will start informal negotiations with the Czech Council Presidency to reach an agreement before Parliament’s vote at the May 4-7 session.  The report was adopted in committee with 37 votes in favour with 4 votes against and 5 abstentions.

France – France has committed over 21% of their stimulus money to environmental and low carbon programs.  Over the next to years they plan to spend $1.9 billion on green housing developments and $38 million will go to sustainable agriculture.    Their incentive program designed to encourage people to replace inefficient vehicles will be allocated $632.5 million and they have committed $1.27 million committed to high speed rail.

Germany –Wind and solar powered energy are already a huge part of Germany’s economy so their green stimulus funds are focused on energy efficiency ($101 billion). Incentives have been put in place to encourage people to buy fuel efficient cars and 2.5 billion will be spend on public transportation infrastructure and $633 million in loans will be used to promote the development of low carbon engines.

Italy – Last month Italy announced a car incentive programs with $1.6 billion designed to encourage people to replace older vehicles with scooters and fuel efficient vehicles.  $79 million dollars have been allocated to finance pail projects

Japan – Japan’s green stimulus is focused on energy efficiency in buildings.  Tax cuts have been put in place to encourage investment renewable energy/energy efficient equipment.    They have set aside $92 million to install solar panels in housing this year and plan to double that amount for the following year.  Later this month Japan plans to announce a green economy plan.

South Korea – South Korea has committed $36 billion to their green job creation plan and is allocating $6 billion to energy conservation.  Rail will be a major focus of their $7 billion used to promote clean modes of transportation.

United Kingdom – The UK is allocating $141 million to address building insulation and heating issues.  Their auto industry bailout included measures to support the manufacture of low carbon vehicles.  Drinking water and waste water projects will receive $255 million and $706 million is to go to a five year inner-city rail development program. It is anticipated that the budget schedule for late April will contain additional green economy measures.

United States – Steps were taken last fall to address high carbon issues include $19.2 billion for credit and tax cuts for renewable energy, with an additional $9.45 in tax credits applied specifically for solar and wind power tacked on as part of a bill extension.  A number of anticipated green measures were cut for the final American Recovery and Reinvestment Act (ARRA).  The final bill resulted in $57 billion in environmental and renewable energy spending being cut from the bill.  Public transportation will receive $10 billion, 2 billion approved for carbon capture and storage, $52 billion will be invested in the smart grid and energy efficiency, and an additional $22.5 billion will be invested in wind, biomass and geothermal energy.

Want more detail on US green stimulus money ?  Read our post “The Stimulus Bill Includes Numerous Green Initiatives”

How do you think the US stacks up in comparison to the other countries with stimulus packages when you take into consideration the size of their economy?

Update: On March 11, President Obama called on the world’s leaders to take additional stimulus action

Update on March 19,  Spain Launches Huge Electric Car Infracture Plan – Project Movele. In November, Spain unveiled an 11 billion euro ($21 billion) two-year package to boost the country’s flagging economy and cut unemployment.  it is their hope that the program will generate 300,000 jobs within a year.  The majority of the cash – €8 billion – was destined for local public works.

Updated  March 20, 2009: The  Financial Times Interactive Graphic was based on The HSBC report, A Climate for Recovery. Among the findings: governments around the world have so far allocated $430bn to climate-related themes, and that the key benefiting sectors include rail, water infrastructure, power grids and building energy efficiency, but renewables less so (apart from in the US).  HSBC believes that what we’ve seen so far is just the first installment.

© 2009, Tracey de Morsella. All rights reserved. Do not republish.

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Author: Tracey de Morsella (323 Articles)

Tracey de Morsella started her career working as an editor for US Technology Magazine. She used that experience to launch Delaware Valley Network, a publication for professionals in the Greater Philadelphia area. Years later, she used the contacts and resources she acquired to work in executive search specializing in technical and diversity recruitment. She has conducted recruitment training seminars for Wachovia Bank, the Department of Interior and the US Postal Service. During this time, she also created a diversity portal called The Multicultural Advantage and published the Diversity Recruitment Advertising Toolkit, a directory of recruiting resources for human resources professionals. Her career and recruitment articles have appeared in numerous publications and web portals including Woman Engineer Magazine, Monster.com, About.com Job Search Channel, Workplace Diversity Magazine, Society for Human Resource Management web site, NSBE Engineering Magazine, HR.com, and Human Resource Consultants Association Newsletter. Her work with technology professionals drew her to pursuing training and work in web development, which led to a stint at Merrill Lynch as an Intranet Manager. In March, she decided to combine her technical and career management expertise with her passion for the environment, and with her husband, launched The Green Economy Post, a blog providing green career information and covering the impact of the environment, sustainable building, cleantech and renewable energy on the US economy. Her sustainability articles have appeared on Industrial Maintenance & Plant Operation, Chem.Info,FastCompany and CleanTechies.