From great recession to green transition

By 22 marca, 202126 julija, 2021No Comments

Before the ascension of the former Eastern Bloc countries in 2004, Portugal had the dubious distinction of being the poorest European member state, often lagging behind on development measures like education and longevity. But today this small coastal nation leads the way on environmental ambition, clean energy and inclusivity, thanks to a citizen-led commitment to the principles of green economy – and the chance to build back better from COVID-19.

Portugal was hit hard by the 2008 credit crunch and the Eurozone debt crisis which followed. Plunged into a deep recession, the state teetered on the edge of bankruptcy in 2011; a €78 billion EU/IMF bailout averted disaster, but at the price of harsh austerity measures and swingeing cutbacks to public services.

The rot which brought Portugal to the brink of collapse ran deep. Four decades of risky credit, private companies leeching state budgets, investment bubbles and corruption had created a toxic, top-heavy economy enriching elites from the public purse. Ultimately, the people who paid the price for this rigged brown economy were ordinary Portuguese citizens: higher taxes, lower benefits, spending on healthcare and education slashed.

Perhaps the only bright spot to emerge from the Portuguese recession was a new national commitment to genuine economic reform – a transition towards a more sustainable, stable, greener future. On exiting the bailout programme in 2014, the government launched an intensive public consultation on the green economy: a coalition of +100 businesses, NGOs, and public bodies led a four-month public engagement to develop a national strategy on climate, green growth, and natural protection.

The resulting Compromiso para o Crescimento Verde (2014) set national targets across 14 indicators to 2030, aiming for green jobs in priority sustainability sectors, resource efficiency, preservation of natural capital, improved biodiversity, and rapid growth in clean energy. New green taxes, cuts to fossil fuel subsidies, a decarbonisation plan, and a green jobs programme have all flowed from this central plan.

Portugal’s response to COVID-19 is also informed by this green vision, with 35% of stimulus earmarked for environmental measures and a five year roadmap for sustainable and inclusive growth that prioritises resilience, the climate and digital transitions. Portugal is, on paper at least, taking a robust green recovery approach embedded within wider and long-term environmental commitments, although much of the plan remains provisional as of February 2021.

A particular area of success is in clean energy, with Portugal an outsized player in the EU renewables sector and well on its way to achieving ambitious 2030 target of 40% renewables. In March 2019, Portugal generated more renewable electricity than it could consume; it now hopes to become a clean energy exporter, and is upgrading its aging electricity infrastructure to achieve this.

Portugal’s current Socialist government, elected 2015, has concentrated on ameliorating the social damage caused by the recession and austerity, reviving public services while continuing to tackle sovereign debt. Green jobs and renewables remain a priority, but additional ambition in key areas like natural wealth accounting, green investment, and integrating environmental factors into social welfare programmes could help accelerate Portugal’s emergence from bailout blues – and help build stability to weather future shocks.

Source: https://greeneconomytracker.org/country/portugal


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