Audio Transcript:

MARCO WERMAN: I'm Marco Werman and this is the World, a co-production of the BBC World Service, PRI and WGBH Boston. There is a silver lining to the global recession or rather a green lining with economies slumping around the world, greenhouse gas emissions are falling as well. The international energy agency estimated today that carbon dioxide emissions will fall by more than two and a half percent this year. That's the sharpest decline in at least four decades. The challenge for governments now is to revive economic activity without putting climate pollution back on the same upward curve. That's where a lot of that stimulus money comes in. Economic stimulus bills enacted in countries from the U.S. to China, included nearly half a trillion dollars in what's being called �Green Stimulus.� The idea was to try to decouple economic growth from carbon emissions. The World's Jason Margolis follows the green dollar trail.

JASON MARGOLIS: Every day tens of thousands of Bostonians shuffle to work. Eases straight ahead. Most have no idea that nine stories up on Boston's City Hall roof, a small windmill whirs in the breeze. The twelve foot diameter turbine is more a symbol than a source of power.

JIM HUNT: It is powering a small amount of computers and other electronics in City Hall.

MARGOLIS: That's Jim Hunt, Boston's Chief of Environmental and Energy Services. The city wants to reduce its greenhouse gas emissions eighty percent by mid-century. That means building a lot more windmills, solar panels and energy efficient buildings. That's expensive. And that's where the U.S. government's stimulus money comes in. Boston is getting six and a half million dollars for green projects like weatherizing homes.

JIM HUNT: Through the funding that we're set to receive and the other incentives that we'll leverage, we think we can retrofit over four thousand homes in the city. Over a hundred jobs as a conservative estimate, direct jobs will be created through this program.

MARGOLIS: The scene in Boston is playing out across the nation. All told, the federal government has allocated one hundred and eighteen billion dollars in stimulus funding for green projects. From weather proofing to high speed rail. Globally, the green stimulus total is about four times that, according to the London based bank, HSBC. Nick Robbins co-wrote an HSBC report called �Building a Green Recovery.�

NICK ROBBINS: The climate change is a prompt for us to think again about our economic strategy, our industrial strategy and to realize actually that we have a multitude of problems that if we tackle together in a concerted way, can actually yield a whole series of economic benefits.

MARGOLIS: In the short term, that means a few new jobs in emerging industries. In the longer term, governments are hoping that their pump priming will position their countries as leading manufacturers of green technologies. According to the HSBC study, three of the four top countries allocating green stimulus dollars are in Asia. That's China, Japan and South Korea. Robbins says South Korea put eighty one percent of its stimulus dollars towards environmental projects.

ROBBINS: Korea is an interesting one and I think it does speak to the fact that countries are recognizing that competitiveness in the future is going to be generated from different sources of national advantage than have been done let's say in the last ten years. We are entering a more energy constrained and carbon constrained world and I think from the conversations we've had with some of the Korean policymakers, this is a very serious intervention that they're making.

MARGOLIS: Over in Europe, the green stimulus picture is a bit more nuanced. By raw numbers, the European stimulus packages are quite small. But Europe's green industry is arguably the most advanced in the world already and by percentage, the European Union has earmarked sixty four percent of its stimulus spending for green projects. That's five times the U.S. rate and nearly double China's. But in all this discussion, remember, not all green projects are created equal. Let's go back to the City Hall rooftop in Boston where Jim Hunt describes Boston's green vision.

HUNT: Solar on our rooftops, wind turbines, offshore, building integrated wind projects on the rooftops of buildings.

MARGOLIS: Over in China, it's a different story.

CHARLIE McELWEE: When you look at the Chinese stimulus numbers and you try to find how much is actually being spent on renewable energy for instance, you come up with none, zero.

MARGOLIS: That's Charlie McElwee, a Shanghai-based environmental lawyer and editor of the blog, �China Environmental Law�. He says the vast majority of green stimulus money in China is being spent on infrastructure projects that are just marginally cleaner than the alternative.

McELWEE: Yes, rail transportation is certainly greener than trucks on the road or moving people by airplane but it's certainly not what you'd consider a traditional green project. It's not renewable energy, for instance.

MARGOLIS: McElwee adds that in China, environmental laws are often ignored on the ground. So for example, China might build a dam to supply clean hydroelectric power but the builders might leave behind a wake of environmental damage. Still, McElwee says China is making progress on the environment and it's spending billions in other investments in clean energy projects. So what's the direct climate benefit of all this clean stimulus spending? Well the HSBC report conservatively estimates that here in the U.S., our one hundred and eighteen billion dollars in green spending gets us roughly a one percent reduction in greenhouse gas emissions. That's why environmental activists say all the green stimulus dollars in the world are just a small part of what governments need to do. Jake Schmidt is with the National Resources Defense Council.

JAKE SCHMIDT: The single biggest thing that they can do to spur those industries and deployment is to put a price on carbon.

MARGOLIS: That would mean a cap and trade system or a carbon tax. And as hard as the U.S. stimulus package was to get through Congress, remember that it received almost no Republican support. Agreeing on a radical change in energy strategy is proving even more difficult in Washington and other global capitals. For the World, I'm Jason Margolis.