Green stimulus, not dirty bailouts, is the smart investment strategy during the coronavirus recession

Leah C. Stokes and Matto Mildenberger, Washington Center for Equitable Growth, May 2020.

We do not have to use dirty energy that damages peoples’ lungs to power our societies. The CARES Act could have helped protect Americans’ health during this pandemic by moving us away from polluting fossil fuels. Yet rather than supporting clean energy, the law is being used to bail out the dirty fossil fuel sector. If we continue along this terrible path, the accelerating climate crisis will disrupt employment, cause property damage, and destabilize the financial system. Why use the rescue programs from the current crisis to subsidize the industry most likely to cause the next one?

This issue brief examines how the CARES Act was deliberately misapplied to the fossil fuel industry, which was already on the ropes before the coronavirus recession. We also examine how future stimulus funds could be targeted toward clean energy, which would create more and better-paying jobs to power our economic recovery. This approach would not just help us tackle the coronavirus recession, but the climate crisis as well.

Overview

In March, the federal government passed the Coronavirus Aid, Relief, and Economic Security bill, more commonly known as the CARES Act. The law aims to provide relief for businesses and Americans struggling due to the coronavirus pandemic and the resulting economic recession. It also had the potential to accelerate the fight against another crisis—climate change—by funding a green stimulus to accelerate the clean energy transition. The coronavirus and climate change are, unfortunately, linked. Air pollution from dirty energy infrastructure makes people much more likely to die from COVID-19, the disease caused by the coronavirus. And those dying in the United States are more likely to be people of color, perhaps in part because of environmental injustices that expose communities of color to much higher pollution levels.

We do not have to use dirty energy that damages peoples’ lungs to power our societies. The CARES Act could have helped protect Americans’ health during this pandemic by moving us away from polluting fossil fuels. Yet rather than supporting clean energy, the law is being used to bail out the dirty fossil fuel sector.

If we continue along this terrible path, the accelerating climate crisis will disrupt employment, cause property damage, and destabilize the financial system. Why use the rescue programs from the current crisis to subsidize the industry most likely to cause the next one?

To learn more, you can read the full report here.