This piece was first published in Forbes on June 25, 2020. It is reprinted with their permission.
The year 2020 has thrown the Paris climate process for a loop. This was to be the year that the nearly 200 signatories of the Paris Climate Agreement would revisit their carbon dioxide reduction goals and pledge to deeper cuts in the service of limiting global warming to 1.5 degrees Celsius.
The COVID pandemic, however, has threatened to sideline efforts to more aggressively address climate change as countries have turned their attention to containing the spread of the coronavirus and providing economic stimulus. Threat turned to reality in April when the United Nation’s climate change body, the UNFCCC, postponed this year’s scheduled climate talks, COP26, which were to have taken place in Glasgow in November. In fact, the Paris Climate process has been in a state of semi-limbo as the world awaits the outcome of the U.S. presidential election, which will likely determine whether the U.S. exit from the agreement will be permanent. The official date for U.S. withdrawal from Paris is November 4, the day after the election.
Yet in the midst of uncertainty and pandemic, work on the Paris process has continued, most recently through a series of virtual meetings aptly named the June Momentum for Climate Change. Despite the gravity of the pandemic, and the challenge of slowing the rate of climate warming below its current 3 degree trajectory, an atmosphere of hope prevailed.
In a session focused on national carbon reduction commitments, the UN’s top climate official, Patricia Espinosa, tied the gravity of the dual health and environmental crises together. “Climate change remains the biggest challenge to humanity over the long run, yet the pandemic shows just how vulnerable we are to a global emergency,” Espinosa said.
Her key message, shared by financiers and country representatives tasked with leading their countries on a path of sustainable development, was that “we can combine the process of recovery from the pandemic with strategies to address climate change.”
The idea might hit some as opportunism in the midst of crisis, but in fact it makes good sense. Much of the world, the U.S. included, has need for public works projects to build and restore infrastructure, from roads to electricity systems, and retrofit buildings for greater energy efficiency. The need extends to demand for more hospitals and coastal resilience projects to defend against rising seas.
A key underlying message at June Momentum was that infrastructure projects bring jobs, and economic recovery can be robust if investment is directed toward projects that sustainably meet future demand.
Public works initiatives have been successfully tried before, notably in the Depression-era United States. Franklin Roosevelt’s New Deal completed the electrification of the United States and laid the roads that would pave the way for the country’s post-World War economic boom. In the near term, millions of out-of-work Americans got back to work.
Chile’s Carolina Schmidt, president of last year’s climate summit in Madrid, noted the “tangible reduction of emissions” during the pandemic as the use of fossil fuel plummeted. “This is a byproduct of the pandemic that will not have substantial impact unless we adopt long-term measures. This economic recovery must be a green, clean and sustainable one.”
The greatest risk is that it will be just the opposite. Investment must be directed toward clean projects and sustainable jobs, yet temptation may be to plow money into the development of fossil fuel resources with dimming prospects for future returns on investment and sustainable employment.
“Because of COVID, countries need to rethink their national economic plans,” said Carlos Manuel Rodriguez of NDC Partnership, which helps countries to comply with their Paris agreements. “This is an opportunity to bring forth short and mid-term stimulus solutions focused on climate.”
To this point the Executive Director of the UNFCCC’s Green Climate Fund, Yannick Glemarec, noted that the G20 countries have pledged in excess of $10 trillion in stimulus for pandemic recovery. Yet there remains a dearth of funding for poorer countries, which face the additional challenge of higher interest rates for project finance.
The Green Climate Fund works with large commercial development banks to support sustainable development. “Our role is to create investment coalitions to support countries in realizing their Paris commitments, by offering grants, equity investment and other options to de-risk projects and make them bankable,” Glemarec said.
The GCF’s backing will allow poorer countries to adopt the more aggressive greenhouse gas reduction targets, formally known as Nationally Determined Contributions (NDCs) that are due in 2020 despite postponement of the Glasgow climate conference.
The GCF has distributed nearly $250 million in grants to help countries move forward with climate resilience projects. The fund is now readying $1 billion, to be backed by several times as much in co-financing, to help countries in more ambitious climate projects, many of which will be valuable tools of economic recovery and job creation.
In the end, addressing the COVID crisis and climate change shouldn’t be viewed as an either/or proposition. As countries intensify their climate commitments in 2020 they simultaneously put in place tools for economic recovery, lay the foundation for long term resilience, and ultimately determine the extent to which our economies, labor markets and built world will be sustainable.
