March 2021 marked the end of a long and, in many ways, dreadful year: at least 2.7 million deaths and 122 million people infected from the COVID-19 pandemic. It was also a year of tremendous economic pain, brought upon by national lockdowns, business and border closures, and disruptions to global supply chains.
Most of the world is still in the midst of the pandemic and far from recovering from the virus. Some of us are still adapting to a new world of work, communicating virtually, linked by our screens to the outside world. And that is only for those of us fortunate enough to work from home: far more cannot do so and many remain on the front lines, risking their lives to keep the wheels of civilization turning; while others still have been forced to migrate away from their homes and life as they knew it.
Climate change, biodiversity loss, and pollution put us at risk of irreversibly changing our relationship with the natural world and vastly degrading human well-being. As governments struggle to redress the dire public health and deeply unsettling economic consequences of the pandemic, we have witnessed unprecedented fiscal and monetary efforts to stabilize and recover from the effects of the lockdown. Since March 2020, the top 50 economies alone have announced nearly USD 17 trillion in spending—and this excludes an additional estimated USD six trillion in central bank purchases. That is more than 20 percent of the global GDP in 2019.
Spending at such a colossal scale presents an opportunity not simply to rebuild the global economy, but to do so better. The world is not only facing a health crisis but an environmental one as well. Climate change, biodiversity loss, and pollution put us at risk of irreversibly changing our relationship with the natural world and vastly degrading human well-being. Extreme weather events such as heatwaves, floods, and wildfires are displacing millions and wreak worldwide havoc. Air pollution kills seven million people worldwide every year. In fact, the next deadly virus might be unleashed by the destruction of forests and by our broken food systems. That is why building better also means building greener.
As money is brought forward from the future to cover current costs and restart the economy at a scale not seen since the world wars, is the world-building back better and greener? Will economies—as a result of this massive spending—be any closer to the goals embodied in the 2030 agenda; or to the agreements reached in Paris in 2015 to stabilize and reduce CO2 emissions? The short answer is: not yet.
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The Global Recovery Observatory, co-led by the Oxford Smith School of Enterprise and Environment and the UN Environment Programme (UNEP), shines a light on efforts to put economic recovery onto solid, green ground. The Observatory tracks over 3,500 policy moves since March 2020 by country and by sector of the economy.
We can, and we must, do better than this if we are to fulfill the 2030 Agenda and the Sustainable Development Goals.
A recent report published by UNEP and the University of Oxford examines the patterns of rescue and recovery spending by leading economies and unearths some remarkable findings. Total green recovery spending constitutes a fraction of the total—less than 20% to be precise. Only USD 341 billion announced spending can be marked as green. To put this figure in perspective, each year global spending on fossil fuel subsidies averages more than USD 350 bn. Or in other words, in the wake of a once-in-a-generation pandemic and economic crisis, spending on green recoveries is less than an average year's worth of subsidies on fossil fuels.
We can, and we must, do better than this if we are to fulfill the 2030 Agenda and the Sustainable Development Goals. High income and advanced economies have a special role to play. As the UNEP-Oxford report shows, advanced economies outspent emerging and developing countries by a factor of 17 to 1. This will only widen and increase existing inequalities, as a generation of progress in alleviating poverty is undone by the effects of the pandemic and lockdown. Economies of low-income countries in the global south are crippled by debt. Debt relief would be imperative for them to shift to clean energy and transport and invest in building upgrades, natural capital (ecosystem regeneration initiatives and reforestation), and research.
And given the interconnected state of the world—where environmental and climate and health issues are not contained by national borders—we all share an interest in seeing solutions that increase human well-being and capacities everywhere. This includes our basic life support systems: a stable climate, healthy ecosystems, and clean air and water.
By looking at the past, we can see into the future. One year from the onset of the pandemic, a window for transformational spending and investment remains open—with sums still being brought forward at a scale unthinkable since the Great Depression.
Governments' pledges for a green recovery are popular because people everywhere understand business cannot go on as usual. Through the Observatory, we will see whether those pledges are translated into actual spending that creates jobs, reduces inequalities, and restores a balance with nature.