A global jobs plan — not another global target

In the final days of March, President Biden announced his American Jobs Plan, a $2.3 trillion package that includes the single largest climate change investment in American history. 

The plan has struck a chord with the public and was lauded by many climate advocates. But America produces only 15 percent of global annual emissions and is on track to emit just 5 percent of carbon dioxide into the future. In other words, an American Jobs Plan is not enough. We need a Global Jobs Plan.

Biden’s rescue and jobs plans provide a pretty good roadmap for how to tackle climate change and recover from an economic crisis all at once. First, pull the economy out of its depths by any means necessary. Second, reframe the climate conversation around “jobs, jobs, jobs.” Third, focus on sector-specific technology and infrastructure investments that will bring both emissions and economic benefits. 

Biden has his first opportunity to lead by “the power of our example, not the example of our power” at the Earth Day Summit on Thursday. However, the Biden administration has to prove that America’s return to climate summitry is more than mere pageantry. Doing so will require dedicating meaningful financial and diplomatic resources towards innovative and ambitious new initiatives, rather than vague promises that can be broken by subsequent administrations. 

What we don’t need is a Global Jobs Target. We need a Global Jobs Plan. 

A Global Jobs Plan should create and empower — where possible, “minilateral” groups that are focused on solving specific decarbonization challenges. A minilateral group pulls together the smallest number of countries necessary to make major change on a given issue, vastly improving the chances of rhetoric leading to action. Groups like the Powering Past Coal Alliance, Tropical Forests Alliance, or even the International Renewable Energy Agency, bring together public and private sector participants, and outline clear incentives for action. Further, they are most effective when structured in such a way that they embrace experimentation and can learn from their mistakes. 

An immediate opportunity for the Biden administration is green debt relief, where the G20 already acts as an effective minilateral forum. The American Jobs Plan is only possible now that the American Rescue Plan has improved the economic situation of low-income households and cash-strapped state governments and municipalities. The Global South was already teetering towards the brink of a sovereign debt crisis before COVID-19 struck. They lack the ability to leverage treasury back bonds to raise debt and there has been no plan, like the proposed Global Jobs Plan, to help them. The G20 came together early in the crisis to pass an important Debt Service Suspension Initiative (DSSI), which they agreed to extend to the end of 2021. However, neither the DSSI nor its accompanying “Common Framework” address the structural imbalances that create instability, or relate the burgeoning debt crisis to climate action. 

The G20’s largest creditor nations, alongside multilateral creditors such as the World Bank and International Monetary Fund (IMF), should build a new facility capable of offering green debt relief solutions to low-income countries. This could include debt-for-climate swaps, where debt repayments are essentially exchanged for home-grown climate action. Another option is to recapitalize sovereign debt into green bonds and other financial instruments that provide performance-linked financial incentives for tangible action. In the short-term, a reduced debt service burden would create fiscal space for countries to pursue economic rescue packages of their own. Over a longer time horizon, green debt relief would also generate stable streams of revenue for climate action and green recovery measures, such as infrastructure spending. 

But debt relief alone is insufficient. While domestic climate actions are increasingly embracing the promise of “green jobs” and “green growth,” global climate talks offer few political wins their leaders can take home to a skeptical public. To date, Biden’s political strategy has been to equate investment needs with the political appeal of job creation. In a world where we meet our Paris Agreement climate goals, annual investment in global energy systems will have to reach over $3 trillion by 2030 — triple what it is today. To facilitate all this new investment, debt relief should be paired with ambitious multilateral financing packages that crowd-in private sector investment. 

The Biden administration should bring large private financial players into these minilateral groups, both pressuring and incentivizing them to focus their efforts on tangible goals. These efforts could be coordinated regionally, with bespoke plans based on identified needs and existing capabilities. International financing institutions like the IMF and World Bank will need to expand their lending and credit enhancement instruments through a coordinated framework, and adapt the financial instruments used in these packages to leverage private capital. For example, RMI, where two of us work, has laid out a plan for what that could look like in the Caribbean, showing how coordinated investment in distributed energy resources can create jobs, increase climate resilience and bolster economic diversification.  

Further, it is not enough to focus on just financing clean energy, but providing a just stable transition from fossil fuels, especially coal. There is a global overhang of investment in existing infrastructure that is contributing to the climate crisis and a future risk to economic stability. For example, global coal use must decline 80 percent by 2030 to keep Paris Agreement targets in reach. Moreover, much of this infrastructure is already stranded in a high debt-to-GDP environment, and as the energy transition progresses and climate impacts mount, more and more of these assets will be left on the books, with no revenue to show for it. 

Countries can get ahead of these challenges by establishing dedicated groups to renegotiate and refinance these investments, while sharing lessons on how to provide a just transition for affected communities. The recently announced Just Transition Fund for Poland, funded by the European Commission and World Bank, is one such model. Both donor parties and recipient countries could benefit from transitioning to green infrastructure using this model, creating jobs in both countries while accelerating climate action. 

The time for targets is over. It’s time to get to work. 

Lachlan Carey is an associate fellow with the CSIS Energy Security and Climate Change Program. 

Justin Locke is a managing director responsible for RMI’s Global South programs. 

Uday Varadarajan is a principal in the Carbon Free Electricity program at RMI focusing on how to use cutting edge data and financial, policy, and regulatory analysis to help drive a just transition to clean energy.