Six positive climate change measures to promote economic recovery from the Covid-19 Pandemic
Investing in "green" jobs and businesses

Investing in creating sustainable jobs and businesses through a clean and fair transition for all. Investment should accelerate decarbonization in all areas of our economy.

The COVID-19 pandemic has had an extremely negative impact on people's lives and jobs. With governments spending huge sums of money to recover from the economic downturn caused by the coronavirus infection, the Secretary General said that "we must create new jobs and businesses through the transition to a clean green economy."

According to the IMF, the expected decline in the volume of the global economy this year will amount to almost 3.2%. This slowdown in economic activity will be the largest since the Great Depression and will have a significantly worse impact than during the 2008−2009 global financial crisis. In 2020 alone, millions of people (35 to 60 million people) could be plunged into extreme poverty, reversing the global downward trend of the past 20−plus years. An estimated 1.6 billion people working in the informal sector, including a large number of workers in the so-called piecework economy, are at risk of losing their livelihoods and many of them do not have access to any form of social protection.

With an unprecedented number of business shutdowns around the world to contain the spread of the COVID-19 pandemic, governments quickly realized they needed to act decisively to limit further economic and social damage. To rebuild their economies, many governments have announced fiscal and monetary policy measures of an unprecedented scale — more than $ 9 trillion as of Summer 2020. While there may be an impetus to restore the economy to pre-COVID-19 levels, it is already clear that we will not be able to return to the previous status quo.

The Secretary General highlighted the choices facing governments, saying: "We can go back to where we have been or invest in a better, more sustainable future. We can invest in fossil fuels where markets are volatile and whose emissions lead to fatal air pollution. Or we can invest in renewable energy that is reliable, clean and cost effective.

The transition to a purely zero-emission economy will create many more jobs with healthier and safer conditions than jobs in fossil fuel industries. According to the ILO's findings, action on climate change targeting the energy sector could result in 24 million new jobs by 2030.

The IEA estimates that with proper investments in sustainable energy, 9 million jobs could be created annually over the next three years. The New Nature Economy report concludes that a new economic model based on working in concert with nature, rather than against its interests, can provide material returns of up to $ 10.1 trillion per year and lead to the creation of 395 million jobs by 2030.

Today, about 1.2 billion jobs (40% of total employment) depend on a healthy environment and the economic value added of US $ 44 trillion (more than half of global GDP) depends on nature to a moderate or high degree. For example, agricultural production relies heavily on bee pollination, especially for the cultivation of fruits, vegetables, bast crops and nuts. Without their input, our ability to produce food in sufficient quantities will be severely limited.

Costs are often seen as a barrier to ambitious action to tackle climate change but the human and economic costs of inaction are much higher. For example, heat stress alone is projected to reduce global work hours by 2.2% and global GDP by $ 2.4 trillion in 2030.

Government spending in key areas can foster economic growth and employment growth while reducing climate impacts. Areas ready for such investments include:
Infrastructure investments — from renewable energy assets (energy storage, sustainable hydrogen energy, grid upgrades) to investments in areas such as health and welfare, social housing and the digital economy.
Energy efficient buildings, including renovation and refurbishment work with more efficient thermal insulation, heating and residential energy storage systems.

Education and training to help people unemployed by the COVID-19 pandemic find new and income-generating jobs and address structural shifts related to decarbonization.

Investing in nature to ensure resilience and regeneration of ecosystems, including restoration of carbon-rich habitats and climate-friendly agriculture.

Research and development to promote sustainable farming practices in agricultural countries, ecosystem restoration or accelerated construction of renewable energy installations.
Stop subsidizing polluting industries

Polluting industries should not be subsidized until these industries are committed to bringing their activities in line with the Paris Agreement.

"The taxpayer money used to bail out businesses should help create green jobs and sustainable and inclusive growth. They should not be spent on subsidizing outdated, polluting, carbon intensive industries, " said Antonio Guterres.

Companies that understand the risks of climate change to their bottom line and are able to identify opportunities to move towards sustainable business models are more likely to be more financially sustainable than others and bring greater value to their shareholders, customers and communities. In the past 10 years, green companies have had higher share returns than fossil fuel companies, and companies with a portfolio of investments that are more responsive to environmental, social and corporate considerations. Management are consistently better at dealing with crises and outperforming those with a conventional investment portfolio in the financial markets.

Therefore, long-term public funding — whether in the form of direct subsidies or other forms of financial support such as loan guarantees — must depend on firm climate commitments. At a minimum, government subsidy measures may require companies to have certain obligations. These may include commitments to disclose the financial risks of climate change, as well as to set well-defined initial decarbonization targets for 2030, in line with the goal of achieving pure zero emissions by 2050. In addition, companies that receive taxpayer money must have an investment plan that describes how the new investment will help the company move on a trajectory to reduce emissions.

In key high-emission sectors, concrete measures can be taken to improve working conditions and help companies move towards a "low-carbon path". For example, in air travel, support may be subject to a commitment to cleaner aviation fuels, and support to an energy-intensive manufacturing industry may be conditional on a commitment to purchase energy exclusively from renewable sources.
Stop subsidizing fossil fuels

Subsidizing the use of fossil fuels must end, and the carbon price must provide a market-driven transition to a decarbonized economy. Perpetrators must pay for environmental pollution that harms communities, workers and consumers.

According to the IEA, $ 320 billion in fuel subsidies were provided worldwide in 2019. Of these, $ 150 billion were subsidies for petroleum products, $ 115 billion for electricity, $ 50 billion for natural gas, and $ 2.5 billion for coal. These estimates do not fully take into account all other forms of government financial support for this sector, in addition to direct subsidies. In simple terms, this means taxpayers' hard-earned money is being used to improve the profitability of multi-billion dollar corporations. This is why the Secretary-General of the United Nations has repeatedly called on governments to „tax those who pollute the environment, not people."

Reforms in carbon pricing and fossil fuel subsidies can play an important role in increasing government revenues or spending more efficiently. According to the World Bank, government revenues generated from carbon pricing programs, which aim to ensure that the price of fossil fuels, including emissions, reflects their true value, amounted to about $ 44 billion in 2018. US dollars.

By creating new sources of government funding, carbon pricing can help governments invest more in other priority areas such as health, education or infrastructure, and ensure equitable change in the workforce. For example, the attention should be paid to workers who may lose employment as a result of the transition to sustainable energy around the world, in particular those working in the fossil fuel industries. Rather, they should be supported to find new and better income opportunities.

Quite a few countries, including many developing countries, are taking action to reduce fossil fuel subsidies. Nigeria, for example, recently reformed its fossil fuel subsidy system.

In recent months, the oil and gas markets have seen an unprecedented drop in demand, coupled with a price war, putting the price per barrel below the margins for many producers. As a result, prices for coal, oil and gas are likely to remain low for the foreseeable future. This situation presents an opportunity for governments to phase out fossil fuel subsidies and accelerate the redevelopment of fossil fuel industries.
In oil and gas producing countries and coal-rich countries, it would be prudent to adopt fiscal stimulus measures aimed at quickly disposing of the least competitive assets, diversifying their economies and adopting supportive measures for the benefit of workers and regions that will be affected by the transition.
Integration of climate considerations into all decisions

Consideration of climate-related risks and opportunities in all financial and policy decisions.

Action to combat climate change must be a priority for both governments and corporations. Forward-thinking entrepreneurs and investors are already working to improve the valuation of climate risks. However, governments must do more.

Recently, the Secretary General told ministers that „the devastating impact of the COVID-19 crisis is due to our past and present mistakes."

These mistakes include not taking the Sustainable Development Goals seriously enough, ignoring warnings about the damage we are doing to our natural environment, and ignoring the risks of climate change. "We put up with inequality within and between countries, leaving billions of people alone with the crisis, unable to escape poverty and financial ruin. We have not invested enough in resilience — in universal health care, quality education, social protection, safe water and sanitation. We have yet to address the power imbalances that keep women and girls constantly bearing the brunt of any crisis. "

Assessing the magnitude of climate-related risks to the financial system requires the development of new analytical tools that, for example, integrate climate scenarios into routine "stress tests". Stress tests are already under way by regulators to assess the resilience and strength of banking institutions in adverse situations.

Central banks and financial supervisors should ensure that climate change risks are adequately addressed in the risk management policies and procedures of each financial institution. While voluntary disclosure of climate-related risks in accordance with the guidelines of the Task Force on Climate-Related Financial Disclosures (FATF) is a necessary first step to strengthen and systematize climate risk accounting, there is an increasing need for this practice has become mandatory.

Financial institutions need to better understand climate-related risks and integrate them into their risk management and investment decisions, as well as their longer-term strategies. Changes in climate policy, new technologies and growing physical risks will push the value of virtually every financial asset to be revalued. The firms that align their business models with the transition to a zero-emission world will benefit, while firms that unable to adapt, will be subject to severe fines.

There is a growing interest from companies in adopting sustainable business plans and setting science-based targets consistent with a 1.5 ° C temperature rise scenario, but markets and large financial institutions, with a few notable exceptions, have yet to take the "climate" risks seriously.

Work together for more effective recovery.

Like the coronavirus infection, greenhouse gases know no boundaries. No country, no company can be successful alone.

The Paris Agreement is based on cooperation between countries. Since emissions anywhere affect everyone, everywhere, it is imperative that countries work together to reduce emissions, increase resilience and mitigate the worst impacts of climate change.

The Paris Agreement recognizes that not all countries have the same access to the same financial resources and technologies. In particular, the low- and middle-income countries that have contributed least to this problem often need help from higher-income countries to develop cleaner renewable energy sources and take action that has allowed would they adapt to the effects of climate change. International assistance is critical to achieving sustainable development.

International cooperation and multilateral efforts are also needed to tackle the economic crisis caused by the COVID-19 pandemic. Most countries saw a decline in income while spending increased due to the pandemic. For many developing countries, this means an increase in public debt and a growing public deficit. The pressure on governments, especially in developing countries, to service rising external debt limits their ability to implement policies to attract investment in productive sustainable assets (for example, renewable energy or sustainable transport solutions). Addressing this widespread sovereign debt crisis is necessary to create a fiscal and policy space that allows governments to invest in effective, sustainable recovery, based on the principles of decarbonization and equity.

Public development banks around the world should work together at the national, regional and multilateral levels to help countries identify and finance low-carbon and high-performance activities and develop appropriate industrial policies to increase their resources for sustainable infrastructure and to ensure a just transition for workers and communities. They will also play a critical role in providing finance to build resilience and help countries adapt to climate change.
No one should be forgotten

The transition to a carbon neutral economy must be fair and inclusive. We must make sure that no one is forgotten. And we must secure more women in leadership positions.

Currently, the effects of climate change are being felt in all countries but their impact on different people is different. The poorest and most vulnerable, many of whom are women, are hitting the brunt of climate change. These are people who live in areas prone to flooding or rising sea levels, or who are most affected by heat stress or water shortages. In 2019, due to extreme weather conditions and natural disasters, three times more people were forced to leave their places of residence than during wartime. More than 95% of these cases were associated with hazardous weather events such as hurricanes and floods.

Supporting adaptation efforts, such as flood protection, road construction and climate-resilient buildings, and community resilience, should be a priority for recovery packages. For example, public works programs aimed at generating income for low-income households may prioritize projects that provide co-benefits for adaptation, such as flood and fire protection, ecosystem restoration or drip irrigation.

The shift to a carbon-neutral economy could also adversely affect those working in the most polluting industries with extremely harmful conditions to human health, such as coal mining. This is why we need a just transition that provides employment opportunities for all people. Moreover, measures to combat climate change must not result in new costs for those who cannot afford them and cannot cover them without government support. The costs of combating climate change must be borne by those responsible for the pollution.

Climate change mitigation activities are activities to achieve the Sustainable Development Goals. These are goals for all countries and all people. They can still be achieved if governments, businesses, cities, civil society, all of us and each of us mobilize all our efforts to demand results now and demand that no one is left behind.