G7 should spend $10tn to back green economic recovery

Photo: AP Boris Johnson

The group of world richest countries will have to spend some 10 trillion dollars to facilitate a green investment driven recovery, Reuters reported quoting a report provided to UK Prime Minister Boris Johnson. The recovery is seen passing through energy transformation to slow climate change. US President Joe Biden is expected to join other Group of Seven leaders at a G7 summit chaired by Johnson in Cornwall, southern England, on 11-13 June.

Nicholas Stern, professor of economics at the London School of Economics, said in a report for Johnson that the G7 was a crucial opportunity for the West's richest economies to make a real change to the global economy. "The transition to a zero-emissions world provides the greatest economic, business and commercial opportunity of our time," Stern said in the report.

"At the heart of the proposed vision for the economic response to the pandemic is a coordinated global programme of investment for recovery, reconstruction and transformation that can boost all forms of capital - physical, human, natural and social," Stern said.

G7 countries should set a common goal to raise annual investment by 2% of GDP above pre-pandemic levels for this decade and beyond and improve the quality of investment - equal to about $1 trillion per year in additional investment over the next decade. The G7 leaders should ensure a timely global distribution of vaccines by immediately closing the $20 billion funding cap of COVAX, a global programme to provide vaccines mainly for poor countries.

After Johnson called for countries to do more than produce "hot air" rhetoric on climate, the report said the G7 should come up with credible ways to meet Biden's climate goals.

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