Global Corona crisis: The only way out is through the way into sustainability

By Stefan Schurig, F20 Secretary General

Humankind is faced with an unprecedented global crisis and it isn’t over until we draw the right conclusions and stop repeating the failures of the past. Governments around the world are trying to prepare for the worst impacts yet to come by rapidly ramping up hospital capacities, medical aid and strict orders on ‘physical distancing’. And while many countries are amid managing acute symptoms of the crisis, legislators are also working on economic stimulus packages to avoid a collapse of the national – and global – economy. Because of locked down cities and communities hundreds of thousands of people are losing their jobs and essentially their basis of their existence. They need back-ups on all levels. We are indeed experiencing an attempt to exhibit political leadership of all kinds and to some of us this crisis may actually be serving as a good reminder of how important a functioning public sector is – especially in times of crisis.

Stimulus packages are indispensable – but they need to be based on sustainability and climate action unless we intend to repeat our failures of the past.

If we want to cope with the massive impacts on our economy, I think it bears mentioning though, that economic stimulus packages are completely pointless unless they are based on the premises of sustainability and incentivise higher ambition for climate action. The crisis offers the opportunity to turn the switches for sustainable transformation, including long-term changes to our economic, social and political systems. Otherwise, any stimulus will most probably be ineffective in the mid- and long-term perspective and propelling next global crisis. Be it due to immense environmental pollution, massive distinction of biodiversity leading to grave impacts on the global food production, water shortage, energy crisis, extreme weather events or everything combined.

While the origin of the Corona pandemic still has to be further investigated it’s obvious that the global spread of the virus is rooted in the way industrialised countries live and consume. In addition to that, the numbers of worrying courses of the diseases including the painfully growing numbers of deaths cannot be understood without the impacts of pollution.

A wake-up call

As George Monbiot, columnist of the Guardian, describes it in his recent article ‘The coronavirus pandemic is a wake-up call’:  “We have been living in a bubble, a bubble of false comfort and denial. In the rich nations, we have begun to believe we have transcended the material world. The wealth we’ve accumulated – often at the expense of others – has shielded us from reality. Living behind screens, passing between capsules – our houses, cars, offices and shopping malls – we persuaded ourselves that contingency had retreated, that we had reached the point all civilisations seek: insulation from natural hazards.“

The main lesson here really is that this bubble has burst. We should not be trying to go back to square one prior the corona outbreak and think we can simply restart the engine. Far from it. Instead, we all – especially the G20 countries – should be focusing on making our societies more resilient to these kinds of global challenges. Obviously, the key to resilience is not by artificially sustaining a destructive system but by stabilising the environment, reducing pollution levels, deploying a regenerative agriculture and renewable energy system. Only then can we stop the collapse of our ecosystems, ensuring our food supply and by doing everything in our hands to stabilise the sensitive climate systems.

We know what’s at stake and what we have to do and what not to. The broad consensus among scientists around the world allows crystal clear conclusions. The Sustainable Development Goals and the Paris Climate Agreement provide very clear guidance for future investments into new infrastructures or new power plants. Any governmental action to stimulate our economy therefore must be first and foremost based on these goals. We can no longer accept governmental decisions suggesting a trajectory that clearly conflicts with what a resilient society and a healthy – in fact sustainable economy – would entail.

There are already a number of positive signals – even prior the Corona crisis many countries indicated their intention to submit an enhanced climate action plan to the UNFCCC and numerous regions and cities are already working to achieve net-zero CO2 emissions by 2050. The European Union presented a European Green Deal at the COP 25 including its commitment to net-zero emissions by 2050 while ensuring a just transition. And several bold divestment decisions made the round, including the announcement of the European Investment Bank (EIB), the world’s largest public bank to divest from coal, oil and gas. And even the Central Banks and the new Network of Central Banks and Supervisors for Greening the Financial System (NGFS) agreed to be tackling the financial risk of climate change as part of their mandate.

There are also a number of rather encouraging news from the private financial sector: The CEO of Allianz SE introduced a new UN supported climate alliance – the so-called Net-Zero Asset Owner Alliance – consisting of the world’s largest pension funds and insurers, together with the Finance Initiative of the United Nations Environment (UNEP FI) and many other institutions. And Larry Fink, Chairman and CEO of Blackrock, world’s largest asset manager, publicly stated that “Climate Change has become a defining factor in companies’ long-term prospects”. In a letter to CEOs he describes that the world is “on the edge of fundamental reshaping of finance” as “trillions of dollars shift to millennials over the next few decades, as they become CEOs and CIOs, as they become the policymakers and heads of state, they will further reshape the world’s approach to sustainability.“

It really is important that managing the Corona crisis doesn’t slow these developments down but accelerates them!

The good news in these surreal days and weeks is that the concept of green stimulus packages gains massive momentum while I’m writing this editorial. Globally all kinds of stakeholders from quite diverse backgrounds are calling upon government to ensure stimulus packages are aligned with true sustainability guidelines:

In mid-March, the Foundations Platform F20 issued an open letter by German philanthropists to the President of the European Union, Ursula von der Leyen calling for a more determined approach to the European Green Deal, while also making it the basis for stimulus packages that are currently put in place to combat the Corona crisis. The signatories consider the direction taken by the EU Commission to be “necessary and correct”, yet in their appeal to the Commission President and Vice President Frans Timmermans, however, they expect Brussels to increase ambitions in terms of climate protection, international cooperation and climate finance.

“The year 2020 is central to international climate protection in order to counteract global warming that can no longer be contained. It is necessary to act much faster and more powerful. The opportunity must now be seized to close the glaring gap between the goals of the Paris Agreement (with the <2° Celsius limit) and the contributions available so far. This must also form the basis of the EU’s announced economic stimulus programs in response to the global corona crisis,“ says Klaus Milke, chairman of the Stiftung Zukunftsfähigkeit (Foundation for Sustainability) and chair of the F20 platform.

The signatories include Prof. Dr. Michael Otto, Founder, Chairman of the Board of Trustees of the Environmental Foundation Michael Otto, Prof. Dr. Joachim Rogall, Chairman of the Board, Robert Bosch Stiftung, Dr. Michael Schaefer, Chairman, BMW Foundation Herbert Quandt, Dr. Michael Schmidt, Founding family Karl Schmidt, Hansjörg Wyss, Founder, Wyss Foundation or Dr. Felicitas von Peter, Chair, Forum for Active Philanthropy.

In the US, a similar initiative just took off called ‘A green stimulus to rebuild our economy. Their open letter to the congress suggesting a very detailed list of actions and it starts with the notion that the US faces three converging crises: 1) the COVID19 pandemic and the resulting economic recession; 2) the climate emergency; and 3) extreme inequality. “We need immediate and sustained intervention to protect people’s health and economic well-being, with a special focus on the most vulnerable. We must also begin planning our economic recovery in a way that protects us from the impact of climate change and lifts up workers and frontline communities. “

Even senior representatives of global institutions who are usually not suspected to speak much in favor of strict sustainability pathways feel encouraged to issue very clear statements. “Governments are drawing up stimulus plans to counter the economic damage from coronavirus,” said Fatih Birol, the executive director of the International Energy Agency. “These stimulus packages offer an excellent opportunity to ensure that the essential task of building a secure and sustainable energy future doesn’t get lost amid the flurry of immediate priorities.” [1]

As the author, Yuval Noah Harari put it in a most recent Financial Times Article: „The decisions people and governments take in the next few weeks will probably shape the world for years to come. They will shape not just our healthcare systems but also our economy, politics and culture. We must act quickly and decisively. We should also take into account the long-term consequences of our actions. When choosing between alternatives, we should ask ourselves not only how to overcome the immediate threat, but also what kind of world we will inhabit once the storm passes. Yes, the storm will pass, humankind will survive, most of us will still be alive — but we will inhabit a different world.“

[1] https://www.theguardian.com/environment/2020/mar/24/covid-19-economic-rescue-plans-must-be-green-say-environmentalists

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