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A Green Economy Post- COVID-19: Environmentalist’s Dream or Economic Imperative?

by Maisie Kemp Africa Americas Asia Europe Oceania Jun 2nd 20205 mins
A Green Economy Post- COVID-19: Environmentalist’s Dream or Economic Imperative?

The global COVID-19 pandemic is likely to set back the progress made in addressing the climate crisis. Hence, solutions for COVID-19 recovery must incorporate this prior momentum and work in parallel with the principles of a green economy if we are to avoid further climate breakdown. 

Academics are comparing the COVID-19 pandemic to the climate crisis. Whilst COVID-19 is a more severe and short-term crisis, the two are similar in practice, according to a paper led by the Smith School of Enterprise and Environment at the University of Oxford. Similarities include ‘market failures, externalities, international cooperation, complex science, questions of system resilience, political leadership and action that hinges on public support’. Lessons from the current pandemic, therefore, have implications for the future handling of the climate crisis: primarily, that potentially high-risk global phenomena must be handled with urgency to avoid large scale social and economic damages. Acting with delay comes at a huge cost. Just like many scientists warned about the risks of a pandemic much before governments decided to act, scientists have been urging governments to act on climate action before it is too late. The phrase ‘prevention is better than cure’ becomes particularly pertinent with current events, indicating the salience of immediate top-down action. Mark Carney, previous Governor of the Bank of England succinctly phrased this view in 2015: “Once climate change becomes a defining issue for financial stability, it may already be too late.”

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Countries around the world are providing financial assistance to businesses to avoid dire economic repercussions from the pandemic. The lockdowns that have put an estimated 81% of the global workforce on hold have begun to be eased. But many environmentalists are pressuring governments to withhold financial support from polluting companies with no plans to change and to instead provide vital economic incentives for the corporate world to incorporate sustainable initiatives into their practices. Notably, Canada has just announced that for large corporates to access COVID-19 relief, they must disclose carbon emissions and commit to environmentally-sustainable strategies, a potential springboard for other governments to follow suit.  Indeed, the financial decisions made now will be critical in dictating the next decade, giving governments a chance to chart a new course toward climate action. The Financial Times argues that the costs of inaction are staggering- $600 trillion by 2100. This is inevitable if we do not cut greenhouse gas emissions globally by half in the next 10 years, with 2030 expected to see climate tipping points with irreversible damages to our planet

Indeed, many governments are aiming to use their economic recovery strategies to incentivise and boost low-carbon industries with the slogan “Build Back Better.” The Vice President of the European Commission, Frans Timmerman, is driving this push, insisting that ‘all COVID-19 recovery should go towards green industries and businesses’, and ‘not a single Euro should be spent propping up old, dirty industries’. As such, the EU aims to lead the way with a Green Deal, with further action led by Pascal Canfin, Chairman of the European Parliament’s Committee on Environment and Public Health, spearheading the new “Green Recovery Alliance”. Launched on April 14, the Alliance brings together politicians, CEOs, NGOs, think-tanks and business federations from across Europe who are committed to offering investment solutions to drive a green recovery. “COVID-19 has not made the climate crisis go away. The public money that states and Europe will spend to reinvest in the economy must be consistent with the Green Deal,” states Canfin. In line with this, Imperial College’s Executive Director of the Centre for Climate Finance and Investment, Charles Donovan, stressed how diversified renewable energy strategies and investments could offer economies greater stability than that provided by fossil fuels due to greater recent oil market instability. In fact, a report by the International Renewable Energy Agency (IRENA) released in April shows that renewable energy could power economic growth and a green economy post-COVID-19 by spurring global GDP gains of almost US$100 trillion between now and 2050.

A shift to a green economy post- COVID-19 would also provide many much-needed jobs, including in green energy and infrastructure. As Mark Carney recently pointed out, many industries will require restructuring- a chance ‘not to go back to the status quo’- recommending regulatory policies to push for a sustainable post-COVID-19 recovery. 

A recently-published analysis by top economists from universities including Oxford and Colombia showcases potential COVID-19 economic recovery strategies. The paper finds that ‘green recoveries’ are in fact the most economically-viable recovery strategy for countries affected by COVID-19. Some measures include backing clean energy infrastructures as well as retrofitting office buildings to improve efficiency once occupied again, just two of a range of economic and environmentally synergistic measures. Moreover, the COP26 Universities Network builds on this to produce a briefing for policymakers outlining a path to a net-zero emissions economic recovery post-COVID-19. Policies recommended include renewable energy, reducing industrial emissions through carbon capture and storage, electric vehicles and nature-based solutions. The current crisis just shows the ability of ‘natural’ forces to shock the global economy, and will likely provoke a greater motivation for the above policies and strategies to be implemented. 

At the bottom-up level, change is also occurring. Opinion polls have found that many citizens are asking ‘if normal was good enough’, enjoying the increased air quality, tranquillity and reduced congestion brought by lockdown measures. Moreover, 65% of people across the world agree that governments should incorporate climate change mitigation strategies into coronavirus recovery. Cities are implementing a greater focus on walking and cycling to work, with Milan recently unveiling plans for miles of new cycling lanes in the area and the Mayor of Paris announcing a €300 million scheme for a network of cycle lanes. The UK government has also recently announced plans to fast-track £250million of funding and policy reforms to deliver a ‘new era for cycling and walking’ in line with the eased lockdown. The opportunity to turn the tragic negatives of the current crisis into positives through shifting mindsets is also evident in many office workers finding working from home enjoyable, wishing to continue. 

Globally, 2020 is likely to see the largest- albeit likely temporary- drop of greenhouse gas emissions due to halted planes, traffic and industrial production. GHG emissions might fall by 8% from previous years and higher than for previous crises. Whilst this is significant, it is simply a taste of what is needed to halt the worst of global warming. The UNEP estimates that global GHG emissions must fall by 7.6% every year from 2020 to 2030 to keep global temperature increases to less than 1.5°C by the end of the century.

As Mark Carney pointed out during a recent online discussion,  “We have a situation with climate change which will involve every country in the world and from which we can’t self-isolate,” highlighting the ‘terrible situation’ but also a ‘big opportunity’ for a COVID-19 recovery in line with that of a green economy. It seems clear that the time is now for the government to encourage the development of greener economies whilst simultaneously pushing environmentally-positive economic recovery.

About the Author

Maisie Kemp

Maisie Kemp is a final year geography student at University College London. She has gained work experience alongside her degree in the sustainability field, with a particular interest in business and the environment, as well as conservation and sustainable living. Her passions for geography are focused on the interactions between the environment and society.

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