The world was going into a tailspin as FORESIGHT Climate & Energy went to press as emergency measures to tackle the spread of the Covid-19 virus were implemented, causing panic in the markets and increasing the likelihood of a global recession. As shops shut, factories closed and planes ground to a halt, governments scrambled to agree financial packages to bail out companies and support individuals, with some calling for the clean energy transition to be bumped down the political and economic pecking order.
While knee-jerk reactions in certain quarters focused on propping up twentieth-century industries and business models, more forward-thinking organisations and individuals were highlighting the crisis as an extraordinary moment to change the way we work and finance the world — for our health, the climate and prosperity.
The effects of Covid-19 are likely to be temporary, while the threat posed by climate change will remain, says Fatih Birol, head of the International Energy Agency (IEA). “We should not allow today’s crisis to compromise our efforts to tackle the world’s inescapable challenge,” he states, underlining the potential of stimulus packages to “build a secure and sustainable energy future”. Large-scale investment to boost clean energy technologies should be “a central part of government plans,” adds Birol. IEA analysis shows governments directly or indirectly drive more than 70% of global energy investments.
The reaction to the Covid-19 virus and lifestyle restrictions accepted around the world also demonstrate that when we agree as a society something is an emergency, we deal with it. It is clearly easier for people to accept drastic steps for a presumed short period than the sustained lifestyle changes that reducing greenhouse gas emissions require. But the coronavirus crisis should be a wake-up call for the world, showing what can happen when experts and science are ignored. It can be the trigger needed to take climate change forecasts seriously.
The real block to climate action is our collective choice not to act. We now have the opportunity to turn that mindset around, using the pots of money being released by governments to support the clean energy transition and ensure jobs and prosperity for today’s workers and future generations. Pushing back against climate action will help no-one in the longer term.
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty,” said UK Prime Minister Winston Churchill. Now is the time for us to grasp the full range of opportunities offered by this emergency and make the right financial choices to reduce the threats posed by climate change and increase economic and societal resilience.
– By Philippa Nuttall Jones, Editor in Chief
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To create demand for sustainable finance, governments should integrate climate criteria into their procurement and in how they draft policies and regulations
An EU taxonomy to define green investments is expected to enter into force in 2021, but some experts want it to be used immediately to inform stimulus packages aimed at dealing with the social and economic fallout from the Covid-19 pandemic
Europe is considering taking the bold step of introducing a border carbon adjustment tariff on goods imported from regions where carbon pricing is lacking, placing trade right in the middle of its climate ambitions
The UK is often cited as a leader in the transition to a clean energy economy, even though some British public money still flows to oil and fossil gas projects overseas
COVID-19 may have reduced emissions in the short-term, but much more needs to happen to slash fossil fuel use to meet climate targets
The world’s development banks are funnelling ever-greater volumes of finance into clean energy — but the challenge of shifting entire economies away from climate-wrecking activity and towards actions that align investment goals with those of the Paris Agreement requires a more holistic approach
Politically there is broad support in Denmark for financing the green transition through taxes and a carbon emissions tax proposal has been welcomed by parties across the political spectrum, but industry opposition could ultimately quash the idea
China has pledged to peak carbon emissions by 2030 at the latest, but its economic plan for 2021-2025 is expected to approve the building of more coal-powered plants
Many believe the ECB and other central banks should bring climate considerations into the rulebook governing what they support and how
The concept of transition bonds began as an idea to sell bonds that were difficult to market as green bonds, mainly natural gas bonds, but has evolved into an opportunity to accelerate decarbonisation efforts