Build Back Green

Build Back Green
Build Back Green

The COVID-19 pandemic has caused far reaching impacts on world economy. These impacts were largely due to the panic that ensued amongst the general populace regarding the nature and spread of the pandemic and due to the efforts taken by governments across the world, in the form of lockdowns, travel restrictions, import and export restrictions etc.  to contain the spread of the SARS-CoV-2 virus.

The pandemic has led to the rise of the largest global economic recession till date, because of containment measures like lockdowns, travel restrictions, import and export restrictions etc. imposed by the nations. As a result, on one hand we have seen steep fall in Gross Domestic Product (GDP – which is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period) during the first two quarters of this year and rampant loss of jobs  on the other hand.  Estimates by the International Labour Organization (ILO) finds that between April and June 2020, around 400 million full-time jobs were lost across the world. Forecasts by the International Monetary Funds (IMF) have predicted a global economic shrinkage by around 4.4%, this year.

There have also been instances of price gauging of essential commodities, due to panic buying by the consumers leading to shortages of these commodities.

The pandemic has also resulted in impacts on the environment, which albeit short term, has been extremely significant. Like for example, because of the lockdown and restrictions to vehicular movement and industrial activity global carbon dioxide emissions are expected to decline significantly this year. This is significant as carbon dioxide is the principal driver of climate change. Again, restrictions on vehicular movement and industrial activity have led to a temporary decline in the levels of air pollution. Research studies have shown linkage between air pollution and mortality from COVID-19. It was found out that a small increase in particulate matter (PM2.5) corresponds to an increase in the COVID-19 death rate by around 8-16%, depending on the region. Research also shows that air pollution increases the rate of airborne transmission of SARS-CoV-2 (which is the disease-causing pathogen of COVID-19). Again, reduction in industrial activity has resulted in decrease in the concentrations of water pollutants as well leading to improvement in the water quality.

As we see some of the positive environmental impacts like the ones mentioned above, we also find that the pandemic has created issues in the areas of waste management, particularly that of the medical waste managements, as demand and use of more and more disposable medical equipment and gears like personal protective equipment (PPE), testing kits, masks etc. have sky rocketed. The pandemic has also highlighted the impact of unsustainable interference of human activities with the biodiversity, in the form of Deforestation, habitat degradation and fragmentation, agriculture intensification, wildlife trade and climate change. This has created favorable conditions for the transference of zoonotic diseases from animals to humans and COVID-19 is one of them.

Thus, in essence the COVID-19 pandemic has emphasized the importance of environmental health and resilience as a vital ingredient of public health and welfare. It is in this context that the fiscal stimulus packages announced by the governments around the world in response to the health and economic crisis posed by the pandemic becomes important. As close to 30% of the fiscal packages that has been announced are being spent on sectors that are most likely to impact the environment, there are significant opportunities to put in place recovery measures which are both “green and inclusive”.  If these measures are successful in not only creating opportunities for income, jobs and growth, but at the same time is capable of necessitating and accelerating actions on medium and long-term environmental goals, in both national as well as global perspective, then it would significantly enhance the long-term resilience of economies and societies against the mounting environmental challenges of recent times.

Since the industrial revolution of the huge quantities of greenhouse gases like carbon dioxide, methane etc. were released into the atmosphere due to burning of fossil fuels. The ensuing heat trapping mechanism of these gases has led to increase of the earth’s average temperature by well over 1°C as compared to the pre industrial levels by early 2020 and this has largely been responsible for environmental disasters in the form of wildfires, cyclones etc.

The present pandemic, as has been shown by different surveys, have created a somewhat widespread public awareness regarding “the fragility of natural systems and their importance for human well-being” and therefore many governments across the world have included “green” recovery measures, in their policy packages to address the various socio-economic impacts (both short as well as long term) of the pandemic.

These measures include grants, loans and tax relief directed towards green transport, circular economy and clean energy research, development and deployment; financial support to households and businesses for energy efficiency improvements and renewable energy installations among many others.

Although these measures are commendable they are not free from loopholes and criticisms. For example, surveys and analysis suggests that the target areas of these measures has  been largely towards the energy and transport sectors. Less focus has been given on other critical sectors like industry, agriculture, forestry, waste management etc.

A major criticism to these measures that most surveys have indicated is that  the amount of funding directed towards green measures largely outweighs the funding dedicated towards non green measures. Let us look at some stats in this regard.  Surveys conducted by the Organisation for Economic Co-operation and Development (OECD) have revealed that the stimulus packages announced by around 24 national governments of the OECD member countries are to have a direct or indirect negative impact on environmental outcomes; estimates by  International Institute for Sustainable Development (IISD) suggests that around 47%  of the support provided by the  G20 countries are directed towards fossil fuels and only 39% are directed towards clean energy.

According to the OECD surveys, some of the measures that are detrimental towards the environment includes plans to roll back existing environmental regulations (including on water quality, air pollution emissions, and single-use plastics), reductions or waivers of environmentally-related taxes, fees and charges, unconditional bailouts of emissions-intensive industries or companies (such as airlines or fossil-fuel extractive industries), and increased subsidies to fossil-fuel intensive infrastructure (including road transport) and electricity consumers.

It is important and crucial therefore that the recovery and stimulus measures announced by the nations to address the economic downturn presented by the pandemic do not adversely affect the stability and well-being of the environment. It is here in this regard that the idea of “building back better” (BBB) is on the rounds as an effective strategy to address the above-mentioned issue. The concept was described for the first time officially in the United Nations’ Sendai Framework for Disaster Risk Reduction document, which was adopted at the Third UN World Conference on Disaster Risk Reduction held in the year 2015.

The strategy focusses on “reducing the risk to the people of nations and communities in the wake of future disasters and shocks” through the integration of” disaster risk reduction measures into the restoration of physical infrastructure, social systems and shelter, and the revitalization of livelihoods, economies and the environment”.

With regard to the present issue of green recovery, the BBB strategy can be effectively applied by giving emphasis not-only on restoring growth and creating jobs but also on the achievement of the environmental goals and objectives.

Some critical areas to focus in this regard include:

  1. Restructuring of critical sectors and activities to support and smoothen an effective transition to less polluting, climate resilient, resource efficient and socially inclusive economies which will not only be in line with national and international environmental commitments but also support the overall well being of communities and societies both in the short as well as long term.
  2. Implementing fossil-fuel subsidy reforms and carbon pricing, by giving due consideration regarding the distributional impacts. Effective policies are needed to enable the firms to invest in energy-efficient technologies. Also, energy tax reforms must be brought in to address the rising inequalities in the distribution of energy as adequate access to energy is essential for a decent living standard.
  3. More and more investments should be made in realigning infrastructures, in particular the transport infrastructures like roadways, railways, ports etc. towards the long-term environmental goals.
  4. Countries that are rich in non-renewable resources must bring in targeted policies in areas including fiscal and tax policy, financial, energy, and mining sector regulation, and low-carbon technology, while keeping a strong focus on equity aspects of the transition. Fossil fuel rich countries must diversify their exports, to focus on cleaner forms of energy.
  5. Focus must also be given towards improvement of long-term productivity, sustainability, and resilience of global food systems by bringing in policy changes, aimed at removing all those measures, like price-inflation etc., that are detrimental to food production and encouraging investments in innovation, in the areas of sustainable use of land, water and biodiversity resources, climate change mitigation and adaptation etc.

6.One needs to tap into the prospects offered by various green sectors towards employment generation. This is especially significant in the wake of rampant job losses during the time of pandemic. Estimates made by the International Renewable Energy Agency (IRENA) suggests that renewable energy sector has the prospect of employing more than 40 million people by 2050. This would not only address to an extent the issue of rampant unemployment but also help in the restoration of the ecosystem.

All the abovementioned initiatives cannot be successfully implemented by individual nations with their own limited capacity and hence requires enhanced multinational cooperation. International organizations like OECD, the European Union (EU) has decided to take up initiatives in this regard. In the forthcoming months OECD will be taking up initiatives aimed at monitoring and refining the green recovery initiatives taken by its member countries and its key partners. The organization is also planning a major horizontal project in the 2021-22 timeframe to address “policy challenges confronting economies and societies in meeting climate and related environmental challenges”.

The European Green deal which aims to make “Europe climate neutral in 2050” is another shining example of multinational cooperation. This deal is the centerpiece of EU’s strategy to drive the economic recovery from the pandemic

Some inspiring initiatives taken up by a few countries may also be stated in this regard. As for example  countries like South Korea, France and Italy have increased subsidies on  rooftop solar PV ; Colombia has announced a new economic recovery plan that includes an expenditure of around  $4 billion on renewable energy and energy transmission projects; Germany has announced an economic stimulus package of about €15 billion towards developing infrastructures on sustainable transportation (which includes electric car and bus subsidies, EV charging infrastructure and public transportation) and about €7 billion for clean hydrogen (which is crucial for decarbonizing heavy transportation and industry); India’s economic stimulus package includes an expenditure of around $780 million on afforestation measures and forest management.

It can be concluded from the above discussion that one must understand and implement the idea of “Building Back Better”, in order to make our society truly cleaner, safer and equitable in terms of distribution of resources and energy.


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