The need for a green stimulus package

banknotesedited8As governments struggle to combat the effects of the economic crisis around the world, there have been calls for stimulus packages to combine tackling the worsening global economy with the ever urgent need to combat climate change. Rather than seeing the recession as a hindrance or obstacle to reducing greenhouse gas emissions, it can be viewed as an opportunity. A green stimulus package would be a step towards a sustainable future. A report released by Sir Nicholas Stern and colleagues argues that a green stimulus package could:

provide an effective boost to the economy, increasing labour demand in a timely fashion, while at the same time building the foundations for sound, sustainable and strong growth in the future” — An outline of the case for a ‘green’ stimulus

It appears advice of this nature is being taken to heart by governments around world. The stimulus packages of the United States, Australia, and England have all included spending of various degrees on green projects, including energy efficiency measures that address the opportunity that retrofitting and improvement of housing stock and government buildings presents. Barack Obama has stressed the need to create thousands of  “green collar jobs” to offset the rising number of unemployed across America. These packages recognize that insulation (or weatherization as it is called in the US) and improvement of buildings provides a unique opportunity for investment that has a huge long term benefit.

Ralph Chapman at Victoria University has shown that the benefits (in terms of lower energy consumption, reduced emissions, better health of occupants etc) of insulating houses outweighed the cost by a factor of two to one. It is clear why insulation should be an integral part of any stimulus package.

In the face of such seeming consensus that improvement of housing is a good idea, why does the stimulus package prepared by the New Zealand government only contain NZ$124.5 million of spending on housing? Also, why was one of the first items on the new government’s agenda scrapping the planned NZ$1 billion -revenue neutral- household insulation fund? A decision that is now proving to be an embarrassment in the face of international initiatives and a lost opportunity to tackle climate change.  Lets hope the NZ government recognises spending lots of money on new roads is not the most worthwhile investment and that insulating houses and energy efficiency measures will ultimately provide a greater long term benefit.

Image credit: The.Comedian on flickr.

Edited September 2014

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