The post-virus economic recovery could be a green one
INTERNATIONAL - The novel coronavirus has caused unprecedented social disruption and wreaked havoc in the markets.
With the world coming apart at the seams, Helen Mountford, vice president for climate and economics at the World Resources Institute, thinks investment in clean technology and infrastructure could help put it back together again.
“We have a great opportunity now to transition more quickly,” says Mountford, a former official at the Organisation for Economic Co-operation and Development and an expert in how economic measures can be used to reduce climate risks. “This is a moment when we can implement measures to help boost the economy, create jobs, and build climate resilience.”
Governments around the world are implementing extreme measures as they struggle to contain the virus outbreak and its devastating consequences for the economy. So far these have included declaring states of emergency, shutting borders, and locking down entire countries. Once the pandemic abates, the recovery will require massive amounts of stimulus.
There’s a risk that countries and companies will revert back to what they know works, Mountford says. Shovel-ready coal or fossil fuel projects that were halted in recent years on environmental concerns could easily be reactivated. “That would be a huge risk,” she says. “That’s coming out of one health crisis and trying to boost the economy by leading us into another health crisis in terms of air pollution and climate change.” Already U.S. President Donald Trump has sworn to “back the airlines 100%,” making his pledge just hours after a trade group asked for $58 billion to make up for lost business.
Unlike in the aftermath of the 2008 financial crisis, when fossil fuel-heavy and otherwise polluting industries received a major share of the bailout money, today green investment options are plentiful. Renewable energy is cheaper than coal almost everywhere in the world, and increasingly competitive with gas. High-speed trains, electric vehicle chargers, and fiber-optic infrastructure should also be on governments’ minds.
“These are projects that create jobs, attract investment and will lead to economies that are much more efficient and less polluting,” Mountford says. “In the past infrastructure investment meant building roads. Now we can do things like investing in natural infrastructure to mitigate climate change.”
Mountford, who worked at the OECD for 16 years advising governments on environmental policy, will be watching the European Union’s Green Deal closely. The program that aims to transform the region’s economy and industries to reach carbon neutrality by 2050.
“I think the EU Green Deal—and more broadly taking an approach which brings together the low-carbon economy, a resilient economy and ways to protect and support social development—is exactly what we need to get out of this crisis,” she says. “I would hope in Europe this will be seen as an opportunity to seize what the EU has started to lay out as a plan and use it as a basis to boost economic growth and move forward more rapidly than it might otherwise have happened.”