What we need is a shift of national economies away from fossil fuels on to a low-carbon footing and generate new jobs quickly.
This article is part of the series — Post-Pandemic Development Priorities.
It is almost a year since COVID-19 gripped the world, but there is no end in sight. With the virus set to persist into the near future, the United Nations has announced Guiding Principles for the rollout of the UN framework “Building Back Better” — an immediate country-level socio-economic response to COVID-19. The focus, understandably, is on near-term economic recovery, but it is also on turning the crisis into an opening to steer economies towards more sustainable trajectories. Agendas such as the year 2030 Sustainable Development Goals (SDGs) may not have anticipated pandemics, but may be still relevant as guiding principles in the transition to a green economy.
The key aspects of the UN’s Building Back Better (BBB) entail delivering new jobs and businesses through a clean, green transition to sustainable growth, minimising risks through a shift from the grey to green economy, and generating appropriate public policy to forge cooperation within and among nations. In the long run, this would entail investing in sustainable technological solutions and incorporating the disruptive influence of climate and disease risks into the financial system, For now, the UN framework for the immediate socio-economic response to COVID-19 states that “to support on strategies to green fiscal stimulus packages, the United Nations Development System will mobilise the Partnership for Action on Green Economy (PAGE) that provides integrated support on green jobs, economic and environmental issues to plan early response and recovery phase of the crisis.” Accordingly, “the collective knowhow of the UN is being mobilised to implement this framework over the next 12 to 18 months.” PAGE is a joint initiative of the five UN agencies to support nations and regions in reframing economic policies and practices around sustainability to foster greener and more inclusive economic recovery, promote resource efficiency and the creation of green jobs that can form the basis for crisis recovery and resilience.
There is an opportunity to use economic measures to promote renewables, improve waste management, and create efficient delivery of goods and services. The challenge is to achieve quick and coordinated action of the many stakeholders: National and local government leaders, financial institutions, and a wide range of utilities and service providers. The short-term response of governments around the world was to inject liquidity into markets, provide support in cash and kind (eg., food packets) for the unemployed and to boost health systems with specific resources to tackle the pandemic. These were necessary humanitarian assistance in a natural calamity, but we cannot lose sight of long-term economic sustainability.
With the disease returning back in waves over a year, governments have had no choice but to introduce large-scale direct stimulus packages to revive their economies. As against the US$ 11 trillion or more that have been pumped in so far, only US$ 600 billion or so per year is getting allocated to climate investments by governments, multilateral agencies, and the private sector around the world. The scale of current stimulus funding provides a critical opportunity to design stimulus programmes such that it accelerates progress towards net zero carbon emissions by 2050. The European Green Deal is “a new growth strategy that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from intensive resource use.” Similarly the US government has proposed a green recovery plan with a federal investment of US$ 2 trillion over four years. The UK government has set out a 10-point green recovery plan, that is expected to create 250,000 new jobs and is likely to mobilise significant private sector investments in support of its 2050 net-zero goal. France and Germany have emphasised a push for low-carbon economic growth, prioritising renewable energy, green transport, nature restoration and other environmentally beneficial projects. China has committed to adopt a net zero target for 2060, and ensured its emissions will peak before 2030. Japan and South Korea, the world’s two main coal financers, have recently set 2050 zero carbon goals. Additionally, the International Monetary Fund (IMF), the World Bank and the International Energy Agency (IEA) have proposed green recovery initiatives and measures.
However, there are seemingly difficult tradeoffs that governments need to manage. On the one hand, as job losses increase in many countries, governments feel the pressure to continue with the existing industries, many of which could be fossil fuel intensive. While at the same time, some governments and businesses are pushing for a rollback of environmental protections, including climate-related regulations, compelled by the need for economic recovery. For instance, in the US, China and South Korea, the green element of the national economic recovery package has been outweighed by the high-carbon elements, including bailouts for the fossil fuel industry despite stated objectives of carbon neutrality. The US is planning nearly US$ 3 trillion in spending with few environmental safeguards attached, with scarcely any money going to low-carbon efforts, and all this while rolling back regulations that protect the environment. Of this total US stimulus, only about US$ 39 billion is allocated to green projects, while China has allocated as low as around 0.3 percent of its stimulus for renewables and other sustainable projects. Increasing fossil fuel use may not pull nations out of crisis mode as has happened in the case of Southeast Asia, which is mainly a fossil fuel-dependent economy. Decarbonisation, decentralisation and digitisation are suggested as key elements for a clean energy transition in the region along with creating jobs, and addressing environmental and public health concerns.
The question for governments around the world is how to align their US$ 12 trillion worth of economic recovery packages for addressing the social and economic concerns brought about by the pandemic along with their environmental obligations. There may be many possible approaches to a green recovery, but what we need is a shift of national economies away from fossil fuels on to a low-carbon footing and generate new jobs quickly. Investing in renewable energy can generate 2.5 times more jobs than fossil fuels, while a dollar investment in restoring ecosystems can generate nine dollars by way of return on ecosystem services and livelihoods. The International Energy Agency has estimated that 9 million new jobs could potentially be created globally in the coming year if countries follow a green recovery path that entails achieving at least some of the stated goals such as being energy efficient, shifting to electric-powered transportation and infrastructure, improving broadband infrastructure, restoring nature, building infrastructure that is resilient to climate variability, reshaping cities, modifying the electricity grid for renewable energy, adopting recycling techniques, waste management, investing in hydrogen power, and carbon capture and storage.
The pandemic may have rolled back decades of progress on poverty, gender and health, but it has also opened the doors for investing in a green economic recovery. Building back better will be achieved by investing in a green transition that promises to be inclusive, resilient and sustainable.
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Preeti Kapuria was a Fellow at ORF Kolkata with research interests in the area of environment development and agriculture. The approach is to understand the ...
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