A Multilateral and Resilient Recovery Plan

Among the many lessons learned during the pandemic, the climate crisis is intrinsically one of the greatest areas for transformation within the recovery phase. The coronavirus has demonstrated us how unprepared we are when facing sudden and shocking events. The catastrophic consequences of not investing in emergency preparedness and sustainability from early stages have been witnessed by everyone during these past few months. The harm from climate change will be slower than the pandemic, but certainly more aggressive, ruthless and longer-lasting. Changes in seasonal weather patterns, and the rising costs of frequent extreme weather events such as floods, droughts and hot summer months, particularly in developing countries, will become more and more common if we do not address these issues now. Transforming the way we produce economic value and shifting our business ecosystems towards a more sustainable and resilient fashion is essential.

In a report from the Smith School of Enterprise and the Environment, in collaboration with the University of Oxford, a few interesting initiatives were highlighted within the proposals from the fiscal recovery packages of COVID-19:

• Harnessing the potential of renewable energies, battery & energy storage and make renewables cheaper and more efficient. 
• Making the use of fossil fuels more expensive, in order to change behaviour and empower alternative innovations. 
• Launching a green investment scheme and encourage a green market in the form of green bonds. 
• Setting air quality targets and halt deforestation. 
• Integrating climate change business strategies into investments and help re-structuring the fossil fuels industry.
• Regulating carbon pricing, including taxing fuel emissions.

The strategies and policies needed to enable change require strong multilateral cooperation between governments, local authorities, businesses, international organisations and the civil society. Addressing the climate crisis properly will only be possible if everyone involved works collectively and collaboratively. The pandemic must be a wake up call to realise the costs and the impact of a climate catastrophe. 

Accelerating our transition towards a sustainable economy without causing economic harm should be well in consideration. Scaling up technological change; expanding environmental markets; reducing the costs of renewables; and encouraging radical innovation are some examples where accelerating the climate transformation could be done in a friendly manner and without much economic damage.

Developments that tackle these problems; such as replacing fossil fuel resources and driving sustainable global growth should be rewarded, in order to encourage more businesses to engage with environmental and sustainable practices. For example, these may include:

• Encouraging low-carbon developments with fiscal incentives
• Prioritising green policies and clean infrastructure investments
• Fostering electric modes of transportation and innovations
• Promoting the creation of renewable resources
• Implementing waste management systems.

In addition to this, organisations protecting agricultural, tropical forests and our oceans, should also be considered for rewards. 

Accomplishing a successful unfold of these events requires not just better cooperation and partnerships between businesses and governments, but a strong multilateral effort and political will to deliver sustainable change. Implementing new green financing mechanisms would help in gathering the necessary funds to develop resilient business models as well as cutting-edge innovations. Bringing down the costs of renewables is a key feature to make the industry more attractive. More funds in research and development would help in accelerating the development of new tools and technologies.

Countries should adopt key principles ensuring the integration of climate risk and climate objectives in national infrastructure policies and plans. This could help in guiding investment strategies of both public and private financial institutions, particularly multilateral and national development banks. 

All major businesses should adopt short and long term emissions reduction targets and implement corresponding action plans, in accordance with national policy schemes. Major industry sectors and value chains should agree on a market transformation roadmap, consisting of decarbonising their supply chains and the global economy. Financial sector regulators and shareholders should actively encourage companies and financial institutions to disclose critical carbon and environmental, social and governance factors (ESG) – and incorporate them in risk analysis, business models and investment plans.

Implementing these actions will in many cases require significant investments. International and national public finance will be needed to catalyse and help leverage private finance, in particular for low-carbon energy and urban development. This requires calling on the government to be more accurate in their fiscal packages and urge them to accelerate our transition towards a sustainable economy. Demanding our leaders to halt deforestation and restore degraded lands, as well as scaling up science and research in order to encourage cleaner technologies and sustainable innovations will be fundamental in the transitioning towards a digital and green economy.

Achieving a successful transition will require strong international cooperation and political commitment. Demanding and lobbying for policy changes will be key. Therefore, with joblessness now having bounced back above Great Depression levels and with the world in pause mode due to the coronavirus pandemic, encouraging investments in environmental markets and green jobs could lead the way to an extraordinary pathway for recovery and a great selling point in a time of huge uncertainty and instability.