COVID-19 responses and recovery plans—the good news and the bad news
11 May 2020
When the coronavirus pandemic began spreading across the globe earlier this year, many of us didn’t realise how much of our life would be affected. For weeks, the world has experienced a life on lockdown, shop closures and event cancellations. Stock exchanges were panicking, transport was moving in slow motion, and supply chains were disrupted, causing a fall in investment and consumption.
In many countries, the pandemic is already widening social and economic divisions, and deepening the consequences of inequality. While governments around the world are trying to prepare for what is expected to be the deepest recession since the Great Depression, a recent UN Policy Brief states the pandemic is also a chance for policymakers to take measures that will reduce inequalities in the long-term: “As countries implement fiscal stimulus packages, and potentially take the opportunity to strengthen ‘green’ sectors, new avenues for employment will be created, and must be matched with developing skills among those making the transition.”
We have selected a sample of important news emerging from this unprecedented crisis.
Strong voices for a green recovery
While the economic consequences of the lockdown offer a reminder that financial stress and insecurity are grinding daily realities for many people globally, leading figures are calling for action around regeneration. Christiana Figueres, Nicholas Stern and Paul Polman are among the signatories of a letter calling on government to scale-up nature based solutions, that is, solutions that are inspired and supported by nature, cost-effective, and simultaneously provide environmental, social and economic benefits, and help build resilience (e.g. the restoration or protection of mangroves along coastlines). The group argues the coronavirus crisis has, for many people, “heightened our collective awareness of nature’s many benefits—from the tranquillity of the outdoors to clean air and water, natural resources, disease suppression, and the capacity to help slow climate change and protect us from its impacts.”
Mayors of major cities around the world are also planning for life after COVID-19, and some of them have decided to join forces and share knowledge and expertise to overcome the immediate health crisis and build a more resilient world. In a “statement of principles” published as part of the new C40 Economic Taskforce initiative, the city leaders are committing to putting greater equality and climate resilience at the heart of their recovery plans. A series of environmental initiatives are already being rolled out from Milan to Bogotá, New-York and Barcelona to ensure public safety and bolster the fight against climate breakdown. The statement warns the recovery from COVID-19 “should not be a return to ‘business as usual’—because that is a world on track for 3°C or more of overheating.”
Nigeria has used the collapse in oil prices to remove fuel subsidies. The decision is thought to save at least $2 billion a year, at a time when Africa’s biggest crude producer needs funds to deal with the coronavirus pandemic. Previous attempts to remove subsidies led to anti-government protests.
Priority to green building renovation in Europe
The EU economy will shrink by 7.4 per cent according to the European Commission, but this is not an excuse to backtrack on sustainable goals. In an online debate held on 6 May, European Commissioner Kadri Simson flagged the upcoming building renovation wave, rooftop solar and offshore wind as key priorities for the recovery phase: “In September, I will present the ‘Renovation Wave’, a plan to minimise potential regulatory barriers and stimulate a faster pace of building renovation across the EU,” said Simson. “We are aiming for hospitals, schools and SMEs as the first target areas for investment because these sectors are particularly affected by the crisis.”
What happens when the world looks away
While some countries are focusing on building a sustainable economy in line with the Paris Agreement or the European Green Deal, others are using the COVID-19 crisis to step back from green transition and human rights.
Climate Home News reported for instance that the South Korean government backed a $2 billion bailout of the country’s biggest coal plant manufacturer, despite promises to end coal financing: “State-owned Korea Development Bank (KDB) and the Export-Import Bank of Korea, the country’s export credit agency, have agreed to a package of emergency loans for Doosan Heavy Industries & Construction over the last month,” writes journalist Chloé Farand. The company is also aspiring to grow its gas business despite the fact the market was predicted to shrink and was already saturated with well-established competition, according to Joojin Kim, interviewed by Climate Home News.
On the other side of the planet, the government of Iván Duque Márquez in Colombia has declared a second “state of economic emergency” to allow the president to issue decrees without parliamentary consent. The President said the move was necessary to support workers and businesses hit by the pandemic. He added his government would subsidise the wages of workers, and businesses will be allowed to defer tax payments. From November 2019 to the end of January 2021, hundreds of thousands of Colombians demonstrated against various proposed economic and political reforms but unions striking in opposition to President Iván Duque’s policies have had to cancel public marches with the spread of COVID-19.
In Europe, the Bank of England (BoE) has decided to delay its proposed climate stress test due to COVID-19, saying participants needed more time to deliver the exercise within the original ambitious scope. The bank reaffirmed future climate risks requires action now, and climate change remains a priority for the BoE. Meanwhile, the BoE has warned the coronavirus pandemic will push the UK economy towards its deepest recession on record. Policymakers voted unanimously to keep interest rates at a record low of 0.1 per cent and the Monetary Policy Committee was split on whether to inject more stimulus into the economy. Two of its nine members voted to increase the latest round of quantitative easing by £100 billion to £300 billion.
EIT Climate-KIC’s COVID-19 Response: We believe the world needs a simultaneous, multi-dimensional response to COVID-19, to address both the devastating immediate impacts on people, health systems and economy, and longer-term considerations. This includes the need to act now to ensure economic recovery is aligned with climate and Sustainable Development Goals commitments as we consider ways to protect, reboot and regenerate economies. EIT Climate-KIC’s COVID-19-related communications will respond to all of these needs.
Please visit our COVID-19 Response Hub for more information.
Related GoalGoal 12: Foster bankable green assets in cities