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Economic recovery from coronavirus must be linked to environmental sustainability

Published April 1, 2020

Economic recovery from coronavirus must be linked to environmental sustainability

Environmental campaigners have called on governments to link their coronavirus bailout packages to requirements for action on climate change, according to the Guardian.

The view that stimulus plans to help the recovery from the pandemic should be designed with the climate challenge in mind has been repeated in opinion pieces and articles in various publications.

Economic plans worth trillions of dollars in public money are being rolled out to prevent the collapse of businesses, such as airlines and tourism, and to protect the incomes of workers.

Fatih Birol, the executive director of the International Energy Agency said:

“These stimulus packages offer an excellent opportunity to ensure the essential task of building a secure and sustainable energy future doesn’t get lost amid the flurry of immediate priorities.”

Prospect Magazine pointed out that governments drive more than 70 percent of global energy investments. Governments can play a vital role in accelerating the transition to cleaner energy while creating jobs and improving infrastructure. There are five broad areas where governments can act:

  • offer financial incentives to people to replace their cars and washing machines with more efficient versions
  • emphasise the creation of jobs in wind and solar farms or labour-intensive work in improving the energy efficiency of buildings
  • invest to strengthen the electricity grid and integrated smart digital technologies
  • use venture capital investment to develop new energy technologies such as batteries, hydrogen, and carbon capture so they can compete on cost and attract jobs
  • attract more private investment by putting a price on carbon, removing fossil fuel subsidies, and offering loans and co-investment to clean energy projects

Dimitri Zenghelis, from the Bennett Institute, University of Cambridge, said in a piece published on Swiss bank Lombard Odier’s website:

“Amongst the gloom, however, there is an opportunity to look beyond the crisis and support a green economic transition as part of the macroeconomic response to the coronavirus. With a global recession likely in the first half of 2020, governments can utilise unmet investor demand for sustainable assets to underpin a pro-climate stimulus. Such an approach can support income and jobs today and in the years after the worst effects of the virus have abated.”