Governments and financial institutions they are under growing pressure to create economic bailouts made to counter the coronavirus pandemic dependent on climate action in the longer term.
Over the last week, countless billions of dollars price of stopgap measures happen to be announced to battle the coronavirus and limit economic shortfalls.
In the united states, industries are scrambling for any share of the $1 trillion-stabilisation package with the aviation industry expected to receive a large chunk.
Last week, the European Central Bank (ECB) announced a EUR870 billion ($781bn) emergency bond-buying programme to stabilise the euro zone economy 'till the end of the season – the same as 7.3% of the euro area’s GDP.
In contrast, the EU Commission has promised a trillion euros over a decade to finance its Green Deal and offer the union’s intend to be the first climate neutral continent by 2050.
Resounding calls happen to be made for governments and international financial institutions to place the clean energy transition in the centre of stimulus packages, when the human tragedy eases. Almost 15,000 individuals have died in the pandemic using more than 340,000 confirmed cases by Monday.
“We have a responsibility to recover better” than following the economic crisis in 2008, UN secretary general António Guterres warned.
“There exists a framework for doing things – the 2030 Agenda for Sustainable Development and also the Paris Agreement on Climate Change. We must keep our promises for individuals and planet,” he added.
But short-term measures designed to stabilise the economy are extremely far doing little for that transition.
In Europe, the bond-buying programme announced by the ECB – certainly one of Europe's most effective institutions – follows the bank's current purchasing criteria, which proscribes the bank from preferring one sector over another, instead buying what is available on the market.
An ECB spokesman told CHN the bank’s portfolio “may have an increasing number of green bonds” as these are rising available on the market, however their total numbers remain limited.
Stanislas Jourdan, head of Positive Money Europe, a campaign group that has required the ECB to complete more to advertise green finance, said the bank dedicated to full of acquisition of bonds “without any climate considerations”.
“Though the ECB is rightly aiming at addressing the coronavirus crisis, there's a risk that fossil fuels free-ride on those measures to achieve even cheaper financing to maintain their activities,” Jourdan told Climate Home News.
The move will likely put more pressure around the bank's upcoming strategic review of its monetary policy, that is due to consider climate risk, Jourdan added. The ECB can also be likely to look at ways it can benefit drive the continent's decarbonisation.
Ronan Palmer, who leads the environmental think-tank E3G's clean economy programme, told CHN that although Europe needed an immediate economic stabilisation package, such measures ought to be in conjuction with the EU's 2050 net zero emission goal.
As fossil-fuel intensive sectors like the gas and oil and aviation industries are also arranging for economic relief, “this should be the time to keep these firms afloat providing some conditionality how these companies be employed in the future,” he said.
For example, an automotive company could be bailed out on the condition it accelerates the electrification of the fleet when the immediate crisis passes.
NGO Transport & Environment has urged EU governments to create any educational funding to airlines depending on carriers paying taxes and starting to use low-carbon fuels once conditions improved.
This, Palmer added, is needed governments and companies move away from increasingly risky fossil fuel investments “in a controlled manner”.
In the less immediate term, Palmer said he hoped the EU would “clip a recovery package to its Green Deal” – and use recovery efforts to boost energy efficiency, the electrification of transport, the deployment of renewable energy as well as land use change reforms.
“This is the big political battle,” warned Laurence Tubiana, CEO from the European Climate Foundation as well as an architect of the Paris Agreement.
“We could make the right choices and address rapid financial crisis at the same time as ensuring we don't secure the economy in Europe right into a fossil gas mileage,” she told reporters a week ago.
“There are many places that we're able to go ahead and take elements of the Green Deal and quick start them with massive investments that governments will be ready to go for anyway,” she said.
Tubiana insisted the EU required to start aligning its economic response to herpes with its Green Deal as soon as possible.
“Or we accelerate the implementation of the green deal or I'm very concerned this is an entirely wasted opportunity since the fiscal resources is going to be use immediately to tackle the [coronavirus] crisis,” she said, adding this could sap the EU's ability to make progress around the Green Deal.
Under saving money deal, the EU dedicated to become climate-neutral by 2050, increase its 2030 climate target, ensure no-one is left behind within the energy transition and transform key sectors for example constructing and renovating buildings, agriculture and transport.
How quickly the promised government stimulus money might help boost clean energy investments is, however, up for debate.
“Right there is much competition for that stimulus money,” Samantha Gross, a fellow within the Cross-Brookings Initiative on Energy and Climate, told CHN, making a concentrate on clean energies and technologies “challenging” within the short-term.
Gross said the low cost of renewable energy and plummeting rates of interest would, over time, constitute favourable conditions for mass investments in the energy transition. “But we need to get out of this crisis mode before businesses can take advantage of these conditions,” she said.
For Albert Cheung, head of global analysis at Bloomberg New Energy Finance, the economic response to the pandemic will happen in two stages.
The first few months to a year is “when you get cash into people's hands”, he told CHN. As the next few years can be spent shaping the recovery effort.
“That may be the chance of green investments and putting people back to work in jobs that can accelerate the clean energy transition,” he explained.
While stabilisation packages might not immediately assist the clean energy transition, the extraordinary scale of the response by governments and central banks is setting a precedent for similar measures to be presented to tackle the weather crisis, Jourdan told CHN.
Ronan agreed. “It shows the things they [central banks] might be able to do when their take their full weight behind the weather crisis.”
