If there is one early lesson to be drawn from the Covid-19 crisis, it is that governments must be better prepared for the worst. The pandemic has shown the lethal folly of ignoring expert warnings about the need to be ready for calamity, no matter how remote or uncertain it may seem. This should be uppermost in leaders’ minds as they struggle to rebuild stricken economies in the face of rising calls to abandon measures to address another global threat, climate change. Unlike Covid-19, the world has had ample evidence of the damaging effects of global warming for decades. Governments today still have a chance to mitigate these — they should do so as part of the effort to rebuild after the virus.
It is true that the coronavirus crisis is on track to trigger the largest-ever annual drop in carbon dioxide emissions — more than during any previous economic emergency or war. The fall, however, may prove to be as shortlived as the emissions decline after the 2008 financial crisis. It is also not enough to meet the central aim of the 2015 Paris agreement on climate: to keep global warming well below 2C. As countries begin to loosen their lockdowns, governments are being urged to use the crisis to accelerate moves towards a lower-carbon world. Given the scale of the economic damage wrought and the prospect of mass unemployment, policymakers face a difficult balancing act: do they preserve the status quo and rely on fossil fuels to revive their stricken economies or launch new policies to promote a green economic recovery.
They should choose the latter, and emulate the example of President Franklin D Roosevelt. His New Deal used state-funded infrastructure and employment initiatives to push the US economy out of the Great Depression. Today’s governments should use their spending power to help stimulate a recovery from the virus that does not lock in a fossil-fuelled economy. There is no perfect formula. Combating climate change is a long-term endeavour that will require the structure of investment to change for the indefinite future. It must be a global effort; the biggest shifts in investment will need to occur in developing and emerging countries.
Today’s immediate priority is economic stability. Where governments feel themselves forced to support carbon-intensive companies, such support should come with “green” strings attached. At a minimum, corporate bailout recipients should be required to come up with a solid plan showing how they will bring their emissions down to net zero no later than 2050. Some industries, including aviation, require tougher conditions. In the case of its support for Air France, the French government has proposed that overall emissions from its domestic flights should be halved by the end of 2024, a move that will in effect require a significant reduction in the number of short-haul flights operated by the company. Given the climate emergency it makes no sense for intra-European train travel to be more expensive than flying.
Companies should also be required to disclose regularly their physical and financial climate risks, according to fixed reporting standards. This would help attract crucial private capital for greener investment and a permanent shift in attitudes. As we emerge from the Covid-19 crisis policymakers must make their own stimulus packages green, too. After the 2008 financial crash, governments spent too much money on “shovel-ready” infrastructure projects. As a result just $1 out of every $6 was spent on sustainable infrastructure. The opportunity today is greater. The cost of renewable energy has fallen significantly. The sector today provides many jobs, employing 11m people worldwide in 2018.
Other policies will be vital once the crisis eases. Fossil-fuel subsidies should be scrapped. Carbon border taxes should be encouraged. Carbon pricing — in the form of taxation or emissions trading — remains a laudable policy tool, even if carbon taxes have proven an easy target for opponents, sometimes blunting their effectiveness. Additional regulations such as requirements to boost green electricity generation are just as key.
This is not a menu of options. The reality is that all of these policies will be needed, as will changes in individuals’ behaviour. This year was meant to be a turning point for climate action. It is up to policymakers to make sure that goal is not lost in a post-Covid-19 world.