Covid-19 crisis could mark turning point in progress on climate change
One Change: We may be at the beginning of a new era with changes starting to happen
A woman rides her bike, in Bogota, Colombia, where the government is closing 120km of streets to car traffic. Phototgraph: Luis Acosta/AFP via Getty Images
By now, we’ve all heard of how Milan is opening up 35km of streets for walking and cycling, or how Bogata is permanently closing 120km of streets to car traffic. We’ve seen the transformation of inner city London, as well as the more muted impact of new cycle lanes in Irish cities. Those of us who’ve dared for years to hope for such innovation are reluctant to believe our eyes. Our hopes have been dashed too often before.
Yet, it now seems we may genuinely be at the beginning of a new era. Amid all the tragic flux and turmoil, the sheer amount of positive signs are hard to ignore. Take, for example, the scores of chief executives from Europe’s leading banking and insurance firms – including BNP Paribas, AXA, Allianz and Santander – who are backing a recovery plan to retrofit buildings, electrify transportation systems and build renewable energy. Their “Green Recovery Alliance” in the European Parliament includes the two largest insurance companies in Europe and several of the largest banks. “Let us use the present challenge ... as an opportunity for us all to put the environment at the core of a collective rebound,” said their joint statement.
Even the petrochemical industry is finally being forced to accept that the world has changed
An institution you may not have heard of is the Global Investor Coalition on Climate Change but the firms it represents manage nearly half of the world’s capital investments (more than €40 trillion). Last month it lobbied governments on the need to “avoid the prioritisation of risky, short-term emissions-intensive projects”, and instead to channel funds “to accelerate the development of new sustainable and climate-adaptation assets”. Even the cautious and conservative IMF is committing to funding the recovery by focusing on green transition “to a more resilient future”, according to its managing director, Kristalina Georgieva.
One of the world’s most influential economists, the Nobel laureate Joseph Stiglitz, has just co-authored a study showing how going green in recovery can maximise the impact of any stimulus. He and his colleague, Nicholas Stern, examined more than 700 stimulus plans since the 2008 economic meltdown, and concluded that investing in green projects will “create more jobs, deliver higher short-term returns per dollar spend and lead to increased long-term cost savings, by comparison with traditional fiscal stimulus”. They interviewed more than 230 experts, from government finance economists to central bank officials, and their conclusion is that “the Covid-19 crisis could mark a turning point in progress on climate change.”
It’s not just economists and investors who believe this, manufacturers too are committing themselves to change. Some 60 German companies – including iconic brands like Bayer, ThyssenKrupp, Puma and Deutsche Telekom – issued a joint statement calling for any stimulus they receive to be tied to a green transition. Some even outlined specific solutions, such as the major German steel manufacturers, Salzgitter, encouraging the government to seize the opportunity to help it transition steel production from coal-powered to hydrogen-fuelled.
Even the petrochemical industry is finally being forced to accept that the world has changed. Shell cut its dividends to investors for the first time in 80 years. It, along with Exxon, BP and Chevron, have all suffered major quarterly losses – for Exxon, it was the first time in 30 years. Earnings from oil and gas production fell 91 per cent from a year ago. Meanwhile, a new two-gigawatt solar installation in Abu Dhabi will soon provide sustainable, carbon-neutral power to the Emirate for less than half the cost of coal generation.
Of course, there are still great challenges, and many major polluters continue without any plans to change their practices. However, if ever you were thinking of reappraising and daring to take bold steps towards mitigating your emissions and living more sustainably, now is the time.