>BOOST FOR GREEN ENERGY (HSBC)

■ The launch phase of the ‘green stimulus’ is over – we estimate USD521bn was allocated to climate change measures by the end of 2009

■ Delivery in 2009 was weaker than expected at an estimated USD82bn

■ Beyond the stimulus, we see continued commitment to low-carbon growth in recent government budget plans

Delivering the green stimulus

Spending is due to reach USD248bn in 2010, focusing on rail, grid, energy efficiency and renewable energy

The era of announcing green stimulus measures as part of government recovery plans has ended. Since our first report a year ago, we estimate the fiscal commitment to climate-change measures has risen 21% from USD430bn to USD521bn (see A climate of recovery, February 2009).

We estimate actual spending in 2009 was USD82bn, around 16% of the total. That is less than our November 2009 estimate of USD94bn, largely due to our reduced expectations for China and South Korea (see Taking stock of the green stimulus, November 2009). Elsewhere, Australia, Canada, France and the US are now on track to spend their stimulus funds. We expect spending to rise in 2010 as a result, hitting 45% of the total. China will continue to lead the pack with an estimated 39% of the total USD248bn. The European Union and US will follow with around 18% each. Rail, grids, energy efficiency and renewables get the largest allocations.

Beyond the stimulus, recent budget proposals in China, India and the US will boost the low-carbon economy. In China’s 2010 budget, spending on environmental protection is projected to rise by more than 20%. In India, clean-energy measures amount to over USD1bn. In the US, the Obama administration’s 2011 budget request increases allocations to environmental and climate-change measures 46%, some USD21bn more than actual spending in the 2010 budget.

To read the full report: CLIMATE CHANGE