The COVID-19 pandemic has shown us what a global economic crisis looks like.
In just the first few weeks of the outbreak, the U.S. economy was pushed to the brink of a recession more severe than the one experienced in 2008. And due to the extraordinary nature of this emergency, policymakers were left working without a playbook and moved forward to issue trillions of dollars in stimulus in an attempt to maintain jobs and drive recovery.
As the world watches where things go from here, the uncertainty of this downturn is echoing the ambiguity of the virus itself. We have no idea when this crisis will end, and what our world will look like on the other side. That lack of confidence shows in our current market situation.
Even with the unprecedented efforts put in place to protect American jobs, will it be enough to truly keep us afloat until this crisis is ‘over?’ Perhaps what we really need is a sustainable, and fast, job-based recovery that can also grow long-term.
One immediate example comes to mind when thinking of an important sector that can accommodate a large influx of new jobs: green industries.
The rationale is simple, and the impact is two-fold: investing in green industries and tech creates a bounty of new jobs — while simultaneously addressing larger universal concerns such as climate change and a shifting energy sector.
A University of Oxford paper published in May 2020 sheds light on the potential success of this approach. The paper claims that renewable energy generates more jobs in the short-run — such as when jobs are scarce in the middle of a recession. The paper also advocates that recovery policies can deliver on both economic and sustainability goals. Given the magnitude of both crises, this would be an admirable mark to shoot for.
While we can understand the logic behind the standard stimulus packages used to prevent economic collapse, we have also seen them fail to help many everyday Americans, and they do little to invest in fixing issues for the long term. They appear to be necessary band-aids that cover temporary wounds, while they could be used for so much more.
Governments could use portions of these stimulus budgets to redirect investments into green technologies and industries, which will allow us to stabilize, grow and lead the economy into the future.
If you need more proof, here are the numbers: in 2011, the World Bank showed that every $1 million dollars of spending in solar, wind and energy efficiency creates almost 3 times more jobs than the oil and gas sectors. Additionally, for every $1 million in spending, 7.5 full-time jobs can be generated in renewable infrastructure, 7.7 in energy efficiency, but only 2.7 in fossil fuels.
The evidence is clear that this sector is extremely capable of providing cost-effective employment at scale, and if we chose to focus fiscal recovery packages to include green industries, then we can use a jobs-based recovery model that also helps us create a better world.
~ Scott Asner, Founding Principal of Eighteen Capital Group (18CG) in Kansas City, Missouri.